World China Unit, BBC World Service

Throughout his inaugural deal with, President Donald Trump doubled down on his assertion that China runs the Panama Canal.
“China is working the Panama Canal and we did not give it to China. We gave it to Panama and we’re taking it again,” he stated.
The 51-mile (82km) Panama Canal cuts throughout the Central American nation and is the primary hyperlink between the Atlantic and Pacific oceans.
As much as 14,000 ships use it annually as a shortcut to a journey which, earlier than the canal was constructed, would have taken them on a prolonged and dear journey across the tip of South America.
What has Trump stated in regards to the canal?
The point out of Panama in his inaugural speech isn’t the primary time he has targeted on the Central American nation and its transoceanic canal.
On Christmas Day, Trump posted on social media that the “great troopers of China” have been “lovingly, however illegally, working the Panama Canal” – a declare which was swiftly denied by officers in Panama Metropolis and Beijing.
On the time, Panamanian President José Raúl Mulino described the declare as “nonsense”, stressing that there was “completely no Chinese language interference” within the canal.
Trump has additionally threatened to take the canal again by drive, citing “exorbitant” charges being allegedly charged for US vessels to move by way of it – one other declare rejected by Panamanian authorities.
Following Trump’s inauguration deal with, President Mulino once more careworn that there was “no presence of any nation on this planet that interferes with our administration” of the Panama Canal.
The strategic waterway, which handles about 5% of worldwide maritime commerce quantity, is operated by the Panama Canal Authority, an company of the Panamanian authorities, not Chinese language troopers.
Nonetheless, Mr Trump’s inaccurate declare displays the issues of some US officers over China’s important investments within the canal and its surrounding infrastructure.
What’s the historical past of Panama Canal?
Traditionally, the US performed a pivotal function within the development and administration of the passage, which hyperlinks the Atlantic and Pacific oceans.
After a failed try by the French to construct it, the US secured the rights to undertake the challenge. The canal’s development was accomplished in 1914.
It remained underneath US management till 1977, when then President Jimmy Carter signed a treaty to step by step hand it over to Panama, which Trump has known as “silly”.
Since 1999, the Panama Canal Authority has held unique management over the operations of the waterway.
The treaties signed by each the US and Panama stipulated that it shall stay completely impartial, however the US reserves the best to defend any risk to the canal’s neutrality utilizing navy drive underneath this deal.
What’s China’s function within the operations of the canal?
There isn’t any public proof to recommend that the Chinese language authorities workouts management over the canal, or its navy. Nonetheless, Chinese language corporations have a big presence there.
From October 2023 to September 2024, China accounted for 21.4% of the cargo quantity transiting the Panama Canal, making it the second-largest consumer after the US.
In recent times, China has additionally invested closely in ports and terminals close to the canal.

Two of the 5 ports adjoining to the canal, Balboa and Cristóbal, which sit on the Pacific and Atlantic sides respectively, have been operated by a subsidiary of Hutchison Port Holdings since 1997.
The corporate is a subsidiary of the publicly listed CK Hutchison Holdings, a Hong Kong-based conglomerate based by Hong Kong businessman Li Ka-shing.
It has port operations in 24 international locations, together with the UK.
Though it isn’t state-owned by China, says Ryan Berg, director of the Americas Program on the Centre for Strategic and Worldwide Research, there have been issues in Washington over how a lot management Beijing would be capable of exert over the corporate.
A wealth of probably helpful strategic data on ships passing by way of the waterway flows by way of these ports.
“There’s an growing geopolitical stress of financial nature between the US and China,” Mr Berg says. “That type of data concerning cargo could be very helpful within the occasion of a provide chain struggle.”
CK Hutchison didn’t reply to the BBC’s request for remark.
The bids to function these ports confronted nearly no competitors, in response to Andrew Thomas, a professor on the College of Akron who has written a ebook on the canal. “The US on the time did not actually care about these ports and Hutchison confronted no objection,” he says.
Chinese language corporations, each non-public and state-owned, have additionally strengthened their presence in Panama by way of billions of {dollars} in investments, together with a cruise terminal and a bridge to be constructed over the canal.
This “bundle of Chinese language actions”, as described by Mr Thomas, might need prompted Trump’s assertion that the canal is “owned” by China, however operation of these ports doesn’t equate to possession, he stresses.
Beijing has repeatedly stated that China’s ties with Latin America are characterised by “equality, mutual profit, innovation, openness and advantages for the folks”.
What are China’s broader pursuits in Panama?

Panama’s strategic location means China has been vying to extend its affect within the nation for years and broaden its footprint on a continent that has historically been thought of the “yard” of the US.
In 2017, Panama broke diplomatic ties with Taiwan and established formal relations with China – an enormous win for Chinese language diplomacy.
Months later, Panama grew to become the primary Latin American nation to hitch China’s signature Belt and Street Initiative, a trillion-dollar world infrastructure and funding initiative.
The Dominican Republic, El Salvador, Nicaragua, and Honduras adopted go well with and likewise severed ties with Taipei in favour of Beijing.
China has slowly expanded its smooth energy by opening its first Confucius Institute within the nation and offering a grant to construct a railway. Chinese language corporations have additionally sponsored “media coaching” for Panamanian journalists.