Panama President José Raúl Mulino on Thursday brushed aside the possibility of Chinese reprisals after his government moved to take control of two ports at the Panama Canal previously operated by a Hong Kong-based company.
On Monday, Panamanian authorities took over the Balboa port on the Pacific side and the Cristóbal port on the Atlantic side, enforcing a Supreme Court ruling that nullified the contract under which Panama Ports Company, a Hutchison subsidiary, had run the terminals since 1997.
“Nothing is going to happen, and if it does, we’ll see,” Mulino said when asked during his weekly press conference about hypothetical measures from China. After the takeover, Chinese Foreign Ministry spokesperson Mao Ning said China would “firmly defend the legitimate rights and interests of enterprises,” according to a post shared by China’s embassy in Panama on Instagram.
Before the Supreme Court decision, China had warned Panama it would pay “a high price” for canceling the concession. Mulino argued, however, that China depends heavily on Panama for trade and energy shipments. “Everything those people produce passes through the canal. Much of what they sell, they sell through the Colón Free Zone. And all the gas that reaches them passes through the canal,” he said. “They need us more than we need them.”
Calling the now-voided contract with Hutchison “lopsided” and “opaque,” Mulino said China remains “a very important country,” but insisted Panama has endured far more difficult moments, even if retaliation were to come. Hutchison described the takeover as “illegal,” while Hong Kong’s Secretary for Commerce and Economic Development Algernon Yau Ying-wah voiced “strong dissatisfaction and opposition” to what he called a forced seizure of the facilities.
Hutchison has challenged the ruling before the International Chamber of Commerce (ICC) in Paris. About 5% of global maritime trade passes through the Panama Canal, whose main users are the United States and China. Under the occupation decree, the two ports will be operated by other shipping companies for at least 18 months, using Hutchison’s equipment.
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