Following former Panamanian President VARELA’s unexpected decision to sever diplomatic relations with Taiwan and switch diplomatic recognition to China in June 2017, Chinese investment and influence has grown rapidly in Panama. China is moving aggressively to establish a solid foothold in a country it sees as a strategic gateway into Latin America and the Caribbean. Building on its status as the second largest user of the Panama Canal and the largest supplier of the Colón Free Trade Zone, China has begun a nearly 1 billion USD expansion of Panama’s Margarita Port, nearly completed a 165 million USD cruise port project on the Amador Causeway, and won a 1.42 billion USD mega contract to build a fourth bridge over the Panama Canal. These high-profile projects have come on top of a string of agreements between the two countries in areas such as trade, infrastructure, finance, agriculture, and tourism.
Additionally, the two countries are in the midst of negotiations for a bilateral free trade agreement. China’s growing ties with Panama have translated into increased influence for United Front-linked diaspora organizations operating in the country, with many groups leveraging connections with high-level Panamanian officials to protect the community’s interests and serve United Front objectives. China is also intensifying its educational and cultural outreach as its footprint grows through Panama’s sole Confucius Institute and increased scholarship opportunities for Panamanian students. And throughout these new developments, PRC state-run and local Chinese media in Panama have played an important role in disseminating the PRC’s preferred narratives. This report discusses these vectors of influence in depth and assesses the success of China’s influence operations.
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