Panama formally exits China's Belt and Road Initiative as US claims 'victory' in decision
Panama has officially informed Beijing of its decision to withdraw from China's massive infrastructure and investment project, the Belt and Road Initiative, the country's leader announced on Thursday.
Panamanian President Jose Raul Mulino said he had instructed diplomats at the Central American country's embassy in Beijing to submit the required 90-day notice of withdrawal from the memorandum of understanding signed in 2017.
"I do not know what was the intention of those who signed this agreement with China. What has it brought to Panama all these years? What are the great things that this Belt and Road Initiative has brought to the country?" Mulino said at a press conference.
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"So, no [we will not participate]," he added. "This is a decision I have made."
Mulino also addressed concerns about Chinese investment in the Panama Canal, the strategic waterway whose management and operations have drawn scrutiny from US President Donald Trump and his new administration.
Apart from a tender for a canal bridge, won in 2018 by the state-owned China Harbour Engineering Company, Beijing is not directly involved in the venture. However, Hong Kong-based Hutchison Ports in 2021 won the right to operate two ports at the canal's Atlantic and Pacific exits.
Mulino assured US officials that the country was conducting a comprehensive audit of Hutchison's activities and would act if the results revealed any wrongdoing. He ruled out a unilateral cancellation of the concession.
"I am the president of a country that respects the law, I am a lawyer. I cannot and do not have any power other than arbitrary to cancel anyone's contract or concession in this country," he stated.
"If there are violations of the concession conditions or if they cause imminent economic harm to the country, we will act accordingly. But the audit is still ongoing and I will await the controller's findings."
The decision to withdraw from the belt and road scheme came days after US Secretary of State Marco Rubio visited Panama City. Rubio met with Mulino on Tuesday and reiterated Trump's concern about Chinese involvement in the Panama Canal.
Rubio said Washington "cannot and will not allow the Chinese Communist Party to continue its effective and growing control over the Panama Canal area".
The top US diplomat called Panama's exit from the belt and road strategy a "victory" and "an example of President Trump's leadership to protect our national security".
Panama was the first Latin American country to join the infrastructure initiative shortly after severing ties with Taiwan in 2017 and recognising Beijing as sovereign over all Chinese territory.
Beijing sees Taiwan as part of China to be reunited by force if necessary.
Most countries, including the US, do not recognise Taiwan as an independent state, but Washington is opposed to any attempt to take the self-governed island by force and is committed to supplying it with weapons.
A cargo ship waits at Balboa port before crossing the Panama Canal in Panama City on Tuesday. Photo: AFP alt=A cargo ship waits at Balboa port before crossing the Panama Canal in Panama City on Tuesday. Photo: AFP>
Following Rubio's visit, the Chinese ambassador to Panama, Xu Xueyuan, wrote an opinion piece in the local newspaper La Estrella in which she defended Sino-Panamanian ties.
"China has never brought fear to Panama, but rather equality, respect and mutual benefit," Xu wrote, referring to infrastructure projects and the opening of Chinese markets for Panamanian agricultural products.
"If the United States wants to create a 'golden era' for the Americas, it must first respect other countries and ask the peoples of Latin America what kind of era they desire," Xu added.
Also on Thursday, China's ambassador to the UN, Fu Cong, called Panama's decision to withdraw from the belt and road plan "regrettable".
Fu described the China-centred network an economic platform aimed at fostering cooperation among developing countries rather than advancing any political agenda.
"The smear campaign that is launched by the US and some of the other Western countries on the Belt and Road Initiative is totally groundless," said Fu. "We will continue with our efforts in the hope that the Global South can work better."
The ambassador further rejected US claims about Beijing's involvement in the Panama Canal, calling accusations against his country "totally false and groundless."
He insisted Beijing had not taken part in the canal's management or operations and recognised the waterway as a permanent, neutral international passage.
Additional reporting by Mark Magnier in New York
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2025. South China Morning Post Publishers Ltd. All rights reserved.
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