Panama Canal
Recent discussions have been sparked by claims regarding Chinese control over the Panama Canal and alleged biases against American vessels.
Maritime expert John McCown asserts that China does not control the canal itself but operates several port terminals nearby. He notes that the Panama Canal Authority remains independent.
McCown also mentions that the U.S. Navy has significantly reduced its use of the canal, with only five warship transits in the last eight years, indicating a lesser strategic reliance.
On the other hand, Dr. Lawrence Sellin, a former U.S. Army colonel and defense expert, shared a report on the social platform X, claiming that China has had ambitions to influence the Panama Canal since 1998, based on a declassified intelligence document.
Commercially, the canal continues to be crucial for U.S. trade, with 75% of its cargo linked to the United States. Yet, McCown points out that U.S.-flagged ships constitute a minimal fraction of the total canal traffic, with only 27 out of 14,080 transits in 2023 being U.S.-flagged merchant ships.
Hong Kong-based Hutchison Ports is active at Balboa and Cristobal ports, which operate as major transshipment hubs, leveraging their strategic locations at the canal’s Pacific and Atlantic entrances. According to the Panama Maritime Authority, these ports handle a significant portion of the canal’s cargo—around 40% of containerized cargo in 2024.
Hutchison Ports’ operations span a wide range of shipping activities, including container and general cargo handling, passenger ship services, rail terminals, and logistics parks. In 2023, Hutchison Ports globally processed 82.1 million TEUs, with Panama’s ports contributing significantly to its Central American operations.
Hutchison Ports has invested heavily in modernizing Balboa and Cristobal ports and is considered Panama’s largest port investor, generating approximately 5,000 direct jobs and 25,000 indirect jobs, as highlighted by North America Outlook Magazine in September 2023.
U.S. concerns about Chinese influence prompted Panama to launch an audit of Hutchison Ports’ operations amid pressure from the Trump administration.
The Panama Canal itself remains under the control of the Panama Canal Authority, with Hutchison’s role limited to port operations, not canal management, as clarified by multiple sources.
However, from a U.S. perspective, some argue that the Panama Canal should reduce Chinese involvement at the operational level as trade tensions between the two countries escalate. These concerns are primarily geopolitical, reflecting U.S. efforts to counter Chinese influence in strategic locations worldwide.
