Beijing’s ‘Panama Strategy’ Is Global

Chinese regime wants to control key waterways to set up global trade controls and military dominance in a bid to challenge the United States.

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

Commentary

What’s behind the Trump administration’s interest in revisiting the Panama Canal Treaty?

Plenty.

Although Panama technically owns the canal, China operates ports at both ends of it. This gives Beijing the opportunity to militarize its control over it with dual-use infrastructure, potentially positioning it to deny access to the critical waterway, particularly to the United States.

Today, China is the canal’s second-largest customer, behind only the United States. Some believe that Beijing’s influence has already led to disproportionately higher transit costs for the United States and that it violates Panama’s neutrality policy that was negotiated by a treaty with the United States in 1978.

The Trump administration believes the treaty has already been broken, so U.S. action is justified. It also believes that Beijing’s de facto control over the Panama Canal poses a direct threat to U.S. economic, military, and geopolitical interests in the region and the world.

The administration is correct in its assessment.

The ‘Panama Strategy’ Goes Global

In the larger picture, the Chinese Communist Party (CCP) has deepened its presence and influence in Latin America through its Belt and Road Initiative (BRI), as it has in many strategic areas around the globe. The BRI, also known as “One Belt, One Road,” is a global infrastructure and investment scheme to insert Chinese money, influence, and personnel into nations worldwide by building needed infrastructure such as roads, railways, ports, and energy pipelines.

BRI participation typically leads to weaker foreign governments deep in debt to Beijing, resulting in some degree of loss of sovereignty or control over Chinese-built ports and other infrastructure.

Panama’s relinquishing of economic control of the canal to Beijing is a great example of the CCP’s overarching strategy. Its “Panama Strategy” is a systematic way of gaining control over the world’s strategic waterways, shipping lanes, and ports.

This strategy’s main elements involve establishing a global naval presence, extending influence through its BRI deals, and building military sites and artificial islands in key locations around the world. The goal is to expand the Chinese regime’s power in order to overturn the U.S.-led global trading system and its open shipping lanes policy. The Panama Canal isn’t the first, but it is one of many strategic waterways that China controls through infrastructure investments and/or with a military presence through its BRI program.

Beijing’s Big Board Game

For Beijing, the most critical is the South China Sea. With about $3 trillion worth of trade (one-third of global shipping) passing through it annually, China has built artificial islands and military installations in the region to assert its dominance. Of course, this poses a direct challenge to U.S. security guarantees to nations in the region, from Taiwan to South Korea and Japan. This has led to rising tensions with neighboring countries and global powers, especially with the United States and Taiwan.

The Strait of Malacca is another narrow passage for global trade with a heavy Chinese naval commercial presence through BRI. With 60 percent of its imports and 80 percent of oil imports from the Middle East passing through the strait, it’s a strategic vulnerability to Beijing.

The CCP also exerts significant influence in the Suez Canal Economic Zone. Egypt is a BRI participant, and this vital passage linking the Mediterranean Sea to the top of the Red Sea enables China to monitor and potentially control trade between Europe, Asia, and Africa.

China is actively involved in several key waterways through the BRI and has military installations near or on them, including the Strait of Hormuz. This major oil chokepoint connects the Persian Gulf with the Arabian Sea and the wider world, where China has a strategic partnership with Iran, which controls the strait. Beijing also has a strategic military presence near Djibouti, its first overseas military base, to project military power to the Red Sea and the Gulf of Aden

Will US ‘Trump’ Xi’s Grand Ambitions?

China’s sea power strategy has been in force since Chinese leader Xi Jinping took power in 2013. The takeover of key waterways reflects Xi’s broader ambition to assert control over and shape the flow of goods, energy, and military power across critical global chokepoints.

The plan is to secure China’s rise to global hegemon status based on the four strategic areas: economic dominance, unrivaled strategic military power and presence, unchecked geopolitical influence across all global trading regions, and energy security.

By definition, for the CCPs plan to succeed, the United States must fail. The “China Dream” of global hegemony depends upon its ability to dethrone the United States as the supreme global power in each of those areas. Those are the true ambitions of Xi and the CCP.

It is apparent that the Trump administration is not only aware of those grand ambitions but is also prepared to challenge them. The Panama Canal seems like an obvious place to start.

Let us hope so.

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