Panama cozies up to China

Chinese President Xi Jinping visited Panama on Monday to sign a range of cooperation agreements and extend China's influence in Central America.

China only opened diplomatic ties with the nation last year, and with the new deals, Panama became the first Latin American country to sign on to Beijing's vast "Belt and Road" investment initiative.

What they agreed upon

President Xi and his Panamanian counterpart Juan Carlos Varela signed 19 deals, including:

• An extradition treaty
• An arrangement where China will provide a non-specified amount of non-reimbursable aid to carry out various projects.
• Memoranda of understanding on commercial, tourist, educational matters. 
• Other deals on trade, infrastructure and banking.

Read more: China's ambitious foreign policy agenda

Connecting two oceans

Varela thanked Xi for his visit, and recalled that Xi once told him China's economy was an ocean.

"I want to complement those words by saying Panama connects two oceans, and his visit consolidates our country as China's commercial arm and gateway to Latin America," Varela said.

Xi said: "Our bilateral relations have had a strong start after only a year and a half." He wrote in a local paper that the two countries must become "cooperative partners of mutual benefit and shared profits."

Read more: Dominican Republic opens diplomatic ties with China, drops Taiwan

Why is Panama important: China has particular interest in Panama due to its strategic location and its eponymous canal. It is also highly attractive for its political stability, growing economy and financial networks. Beijing hopes to use Panama as a logistics hub to help expand its trade in Latin America and the Caribbean. 

Usurping US power: Beijing's growing role in Latin America has drawn the attention of the US, sparking fears it is losing influence in its backyard. A series of Latin American countries have made moves to strengthen ties with China, initially by disavowing their recognition of Taiwan. That loss is only being accelarated by the bluster of President Donald Trump against Latin American migrants. Nonetheless, experts have warned Panama faces possible reprisals from the US, the primary user of the Panama Canal, if it gets in the middle of a dispute between the two powers.

Further ties: The 19 deals are the start of growing ties. Panama and China are in the midst of negotiating a free trade deal.

aw/rt (AFP, Reuters, dpa)

Every evening at 1830 UTC, DW's editors send out a selection of the day's hard news and quality feature journalism. You can sign up to receive it directly here.