Chinese President Xi-Jinping (L) with his Panamanian counterpart Juan Carlos Varela. Photo: MFA China

By Youri Kemp
Caribbean News Now associate editor
[email protected]

PANAMA CITY, Panama — Chinese President Xi-Jinping arrived in Panama this weekend to pursue further talks of mutual cooperation between Panama and China.

However, tensions over China’s control and influence over the region have been placed first and foremost, as Panama has been a recently contested battleground between the USA and China over resources, strategic points and ports and political action.

At the request of US officials, as noted by a senior Panamanian diplomat who wished to remain anonymous, a plan to build a Chinese embassy on the Amador peninsula overlooking the Panama Canal was axed.

The area, which is said to be home to numerous derelict buildings left behind by US military personnel, has been left abandoned for years.

However, the recent interest by Chinese officials prompted American officials, led by Secretary of State, Mike Pompeo, to pay a visit to Panamanian president, Juan Carlos Varela, to discuss these issues.

This was preceded by another plan drafted by China to build an embassy in central Panama City, which was also axed under pressure by the US government on the government of Panama. More so, popular support for Chinese investment in both projects – particularly the project adjacent to the Panama Canal on the Amador peninsula – had waned greatly and was largely rejected by Panamanians.

Since these issues were settled, the two countries have signed 28 diplomatic and investment agreements.

During his trip, Xi is expected to discuss a 500 million (US$72 million) renminbi-denominated “Panda” bond reportedly full of “goodies”, and is expected be revealed before the end of the year.

Chinese contractors have won major contracts for a port, convention centre and a new bridge over the canal.

China is becoming even more heavily invested in the region, following a significant investment in the Dominican Republic, with a total of $2 billion in pursuit of its “One China Policy”, where aid and investment cash is handed out in exchange for ceasing diplomatic recognition of Taiwan, which the Dominican Republic subsequently did.

The Chinese have also made a recent trip to the island of Grenada with their “Peace Ark”, a travelling naval hospital, showing their naval reach and commitment to the region.

Investments in The Bahamas, Jamaica, and Trinidad have also been significant over the years. Most notably the Baha-Mar Resort project on the capital island of New Providence in The Bahamas, the largest resort investment in the Caribbean ever to get off the ground, in addition to purchasing the historic British Colonial Hotel opposite the US Embassy in downtown Nassau.

Xi’s trip also comes on the heels of US President Donald Trump offering a truce in the current US-China trade dispute and tariff standoff, claiming that the US will hold off on implementing a further US$200 billion tariff escalation against China that would add to the already existing US$50 billion tariff increase earlier this year.

As the US-China dispute ramps up globally, the Central American and Caribbean area, “America’s backyard”, is increasingly becoming an area of targeted importance for China as it soaks up old infrastructure, land and resources neglected by US corporations and government.