- China controls 25-year leases on critical Panama Canal ports
- US and Panama agree to new security pact for military vessels
- Audit reveals $2.4B canal revenue amidst payment disputes
- Chinese firm denies irregularities in port operations
The geopolitical chess match over Western Hemisphere security intensified this week as Pentagon leadership sounded alarms about Beijing's growing military infrastructure network. Recent audits reveal that Panama's government collected approximately $2.4 billion from canal operations last year, while simultaneously negotiating repayment of fees for US naval passages averaging $6 million annually.
Regional analysts highlight three concerning patterns in China's Latin American strategy: systematic acquisition of transportation chokepoints, dual-use civilian-military port developments, and contractual clauses enabling extended operational control. A 2023 Center for Strategic Studies report shows Chinese companies now manage 14 strategic ports from Mexico to Argentina, with 60% containing depth specifications accommodating aircraft carriers.
Panama's decision to audit Hong Kong-based CK Hutchison's canal operations follows Ecuador's 2022 termination of Chinese dam projects over environmental violations. This emerging pattern of contract reviews suggests growing regional skepticism about Beijing's infrastructure promises. The current port audit findings – disputed by CK Hutchison – could influence Chile's pending decision on a $3B Chinese lithium processing plant.
Military strategists emphasize the canal's wartime significance, noting that 40% of US Pacific Fleet reinforcements would require passage through the waterway during Asian theater conflicts. The new sail first and freeagreement addresses longstanding complaints about naval priority access, though critics argue it fails to resolve broader concerns about Chinese surveillance capabilities near canal infrastructure.
Economic analysts identify a troubling precedent in China's Nicaragua Canal proposal – a $50B project abandoned in 2018 after feasibility studies revealed potential environmental damage. Similar debt-trap patterns emerged when Venezuela surrendered oil shipments to settle $60B in Chinese loans, demonstrating Beijing's willingness to leverage infrastructure investments for strategic advantage.
As BlackRock prepares to assume control of canal ports through its acquisition consortium, maritime security experts warn that Chinese AI-powered logistics systems could retain backdoor access to shipping data. The Pentagon's 2025 budget includes $120M for Caribbean surveillance drones specifically designed to monitor dual-use port facilities.
