On June 13, 2017, Panama, which has long been among the handful of nations recognizing Taiwan ahead of the People’s Republic of China, announced its decision to switch its allegiance from Taipei to Beijing. The change in Panama’s affiliation is likely to bring an uptick of Chinese investment in the Central American nation, including the potential pursuit of preferential access to the Panama Canal.
Panamanian President Juan Carlos Varela announced that he is “convinced this is the right path for the country,” adding that Chinese-registered vessels are the second-biggest users of the Panama Canal, according to the Washington Post.
More broadly, the move is the latest sign of intensifying Chinese efforts to establish a robust economic and political presence in Latin America. As also reported by the Washington Post, Jorge Guajardo, former Mexican Ambassador to China, observed that the Dominican Republic and Nicaragua could soon follow Panama’s suit with regard to this shifting allegiance.
This development is a major disappointment for Taiwanese President Tsai Ing-wen, who made an official visit to the country only 12 months ago. Panama joins Sao Tome and Principe as the second country to cancel its affiliation to Taiwan during the Tsai presidency. Taiwan was also excluded for the first time in eight years from summits of the International Civil Aviation Forum and the World Health Organization.
It seems likely that influence related to China’s Belt and Road initiative are weighing increasingly heavy on the decision-making of these political leaders and multinational organizations.