China Makes Panama Pay for Saying No - National Logistics Post

Since March 2026, China has subjected Panama-flagged vessels to a comical number of inspections and detentions far beyond the norm. Chinese ports detained 431 Panamanian vessels between March and June following Panama’s removal of Hong Kong’s CK Hutchison subsidiary Panama Ports Company from the Balboa and Cristóbal terminals on either end of the Panama Canal. The Federal Maritime Commission says the “retaliatory inspections … appear intended to punish Panama” for its removal of CK Hutchison.

CK Hutchison had previously operated the two ports which sit beside the canal since 1997, but Panama’s Supreme Court ruled in February that the contract law that granted CK Hutchison the operation of the ports was unconstitutional. The argument made was that the arrangement improperly restricted Panama’s sovereign control over its resources. (RELATED: To Secure the Panama Canal, Reinstitute the Monroe Doctrine)

CK Hutchison is nominally a private Hong Kong conglomerate — a large business made up of smaller independent companies. Why, then, did the Chinese state treat the loss of the Panamanian concessions as an attack on China? (RELATED: China Poses a Severe Threat in Panama and Leaves the US With No Choice.)

After the ruling by the Supreme Court, China’s Hong Kong and Macau Affairs Office castigated the decision as “absurd,” “shameful and pathetic,” and vowed “to defend the interests of Chinese firms.” The office further warned that if the Panamanian authorities “insist on having their own way … heavy prices both politically and economically will surely be paid!”

China would appear to be retaliating rather heavily against the entire country’s ship registry as a response, but there is a deeper idea at play with implications beyond container terminals and shipping registries.

Panama was once one of the willing participants in Beijing’s campaign for global economic influence: Xi Jinping’s Belt and Road Initiative. In 2017, the country severed its long-standing diplomatic ties with Taiwan and established formal state relations with the Chinese Communist Party. The promise of massive infrastructure investments and government-to-government loans from joining the Belt and Road was too sweet to pass up.

Eight years later, however, Panama became the first Latin American country to withdraw from the BRI under heavy pressure from the Trump administration to cut ties with China. The partnership’s meager returns also contributed to the decision, according to Panamanian President José Raúl Mulino.

While the Balboa and Cristóbal terminals were not Belt and Road projects, Beijing’s response to Panama shows the same assumption underlying the initiative. China markets its investments as voluntary, “mutually beneficial” partnerships; China delivers access to loans and infrastructure development in exchange for commercial access in the participating countries. China treats that commercial access as an entitlement, a foothold to be maintained via economic pressure. When Panama removed CK Hutchison from the canal terminals, Beijing found an unrelated pressure point in the cargo fleet of Panama and began squeezing.

The Trump administration leaned on Panama in 2025 to reduce China’s influence around the canal because of security concerns. But by answering the 2026 Panamanian court with hundreds of ship detentions, Beijing demonstrated precisely why Chinese influence and control of the Canal is a security concern.

China has, to a degree, shown its coercive hand in the Panama situation. Other countries beginning to realize that the Belt and Road’s promised “mutually beneficial” partnership may instead be akin to a Trojan horse within their economies should take note. The road out may come with steep tolls.

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