A Short History of Panama Canal and Chinese Interest in It

A container ship passes through the Miraflores Locks as it transits the Panama Canal in Panama City, Panama, on Sept. 20, 2023. Justin Sullivan/Getty Images

Commentary

PANAMA CITY, Panama—A Chinese cultural center on the outskirts of Panama City was busy with people coming and going on a Wednesday afternoon in March, a reminder of China’s long history in the region.

The first Chinese immigrants arrived in Panama in 1854 to help build the railroad to connect the Atlantic and Pacific oceans. Groups of Chinese continued to migrate to Panama in the 1800s and to help with large constructions projects, including the Panama Canal.

Today, the concern from President Donald Trump and some other policy leaders is that China’s influence in the region has extended far beyond culture and is aimed at “increasing Chinese government presence” in the Latin American country, according to Victoria Coates, vice president of the Davis Institute for National Security and Foreign Policy at The Heritage Foundation.

During his inauguration speech on Jan. 20, Trump said, “China is operating the Panama Canal. And we didn’t give it to China. We gave it to Panama, and we’re taking it back.”

When Trump returned to office in January and saw the ways China was building infrastructure around the Panama Canal and that a Hong Kong-based company was operating ports on either side of the canal, “He said, ‘No, this can’t go on,’” Coates told The Daily Signal.

The Hong Kong conglomerate CK Hutchison recently agreed to sell port holdings on both ends of the Panama Canal to BlackRock, an American global asset manager.

The situation in Panama involving China’s influence is critical to the “national security interest of the United States,” Coates said, adding, “There is no need for China to be here.”

The security of the canal is vital to the U.S. as American military vessels use the Panama Canal to move between the Atlantic and Pacific oceans.

“We have a long history of partnership with Panama,” Coates said, adding that the U.S. has “a very friendly president in President [José Raúl] Mulino right now, so I think it’s a great time to really build that relationship and make sure the United States’ national security interests are protected.”

China and the Canal

The Panama Canal has drawn increased attention in the news following Trump’s claim that China is “operating” the canal.

Today, about 8,500 people work at the canal, none of whom are Chinese, according to Miguel Lorenzo, vice president for infrastructure and engineering at the Panama Canal.

“I need to be completely clear with the facts,” Lorenzo told The Daily Signal while standing just outside one of the command centers overlooking the canal’s locks. “I think there’s eight non-Panamanian people who work in the canal,” he said, adding, “There’s a Colombian. There’s a couple of Americans that are still working for the canal. The other one, I think, is Chilean. No Chinese.”

In 2015 or 2016, Lorenzo said, the canal had “one construction contract with a Chinese contractor,” but “it turned out not to be a good experience” and has since ended. “As far as supplies go, we do get some things that come from China. It’s unavoidable,” he said.

Over the years, China has engaged in infrastructure projects around the canal—and continues to do so.

Panama established diplomatic ties with China in 2017, and the following year, Panama announced that China Communications Construction Co. Ltd. and China Harbour Engineering Co. Ltd. had won a bid to construct a fourth bridge over the Panama Canal.

In February, the BBC reported that the China Railway Tunnel Group Co. is building an extension to the Panama City Metro under the south side of the canal.

History of the Canal

The French started construction of the Panama Canal in the 1880s, long before the U.S. took over the massive engineering project in 1904. The canal, which connects the Caribbean Sea and Pacific Ocean, was completed in 1914.

The canal created opportunity for an economic boom in America because goods could now travel more easily and quickly between the East and West coasts of the U.S.

The U.S. operated the canal for decades, but over time, the Panamanians began to view American control of the canal as an infringement on their sovereignty. In 1977, President Jimmy Carter signed a treaty with Panama to gradually transfer control of the 51-mile canal to the nation it bisects, and on Dec. 31, 1999, Panama assumed full control of the canal.

Originally only two locks, the canal was later expanded to add a third lock lane that is longer and wider. A complex system of switches and levers operated the canal until the early 2000s, when a digital system was put in place to run the canal.

Operation of the Canal

Between 36 and 38 ships pass through the canal each day, the majority of which are commercial container ships.

Container ships are “our bread and butter,” Lorenzo told The Daily Signal, adding that about 60 percent of the ship that pass through the canal are commercial container ships.

“And then the second segment of the market, that it’s probably about 30 percent-35 percent, is energy,” he said.

Military ships, including U.S. Navy ships, also use the canal.

Traveling from one side of the canal to the other takes about 10 hours, but saves vessels between 10 and 22 days from having to traverse down and around Cape Horn at the tip of South America.

The lock system on the canal operates like stair steps through multiple lock chambers. Each chamber holds millions of gallons of water. Water levels are raised and lowered to bring each ship above sea level to meet the water level of the Gatun Lake before lowering the ship back down.

When at its lower level, the water in the lock chamber is about 40 to 45 feet deep, and 70 feet deep when the water level is raised all the way to the top. When raising or lowering the water levels in a lock chamber, 27.5 million gallons of water are moved in about 10 minutes, Lorenzo explained.

The original locks are 110 feet wide and can accommodate ships up to 106 feet wide, leaving only 24 inches of space on each side of the vessel.

When a ship is ready to traverse the canal, the ship’s captain steps aside, and a specially trained canal pilot enters the ship with a crew of about 20 who will guide the vessel from one end of the canal to the other.

Reprinted by permission from The Daily Signal, a publication of The Heritage Foundation.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.