This month, Chinese President Xi Jinping met with Panamanian President Juan Carlos Varela in Panama City. This was the first ever visit to the country by a Chinese leader, quelling any doubts over China’s solid investment in Latin America and the Caribbean. Over the period of 2015-2019, Beijing has pledged USD500 billion in trade and USD250 billion in direct investment to the Latin America and Caribbean region.
The worriers say China only targets countries of poor governance, exacerbating their debt sustainability problems. But if you ignore the daily naysayers, and look at the next decade, it is clear that China is the future. “There is no reason for China to stop growing. At 7% annual growth, we can expect a new world order anchored in the Far East,” says Daniel Abrego, CEO of ILC.
For Panama, China is also the biggest user of the Canal after the United States. “With Panama’s strategic location, political stability, low unemployment and constant GDP growth, both countries stand to benefit greatly and meet high expectations,” continues Abrego.
On the agenda between the two leaders was the signing of several cooperation agreements (including strengthening bilateral ties in commercial, touristic, maritime, educational and agricultural sectors). Meetings with business leaders and a visit to the expanded Panama Canal and new locks were also on the agenda.
Overall, China is becoming an increasingly important economic partner for the region. Both countries are staunch supporters of free trade and the opportunities this visit will create point at a bright chapter ahead. Panama stands to accelerate its infrastructure and economic development, while the Belt and Road Initiative continues to expand as China competes for global leadership.