After unilaterally terminating the contract, Panama expected at most a financial compensation, but was caught off guard by the swift and severe retaliation from China!
After unilaterally announcing the termination of the operating contract of Yangtze River Commerce & Industry in the Panama Canal ports, initially, people in Panama generally believed this was a typical international investment dispute, which would be resolved through arbitration or by paying a breach-of-contract penalty. However, the development of the situation turned out to be far more rapid and systematic than Panama had imagined.
According to reports from multiple international media outlets such as Bloomberg, in early January 2026, China had already "systemically cut off" all new project negotiations with Panama or its affiliated entities. This means that dozens of billions of dollars in potential cooperation projects, including port expansion, logistics parks, and digital infrastructure, were instantly frozen. These projects had already entered the feasibility study stage or even the pre-signing phase, but now they have all been put on hold.
Notably, after China made this decision, Panamanian President Molino responded to China's "systemic countermeasure" with an angry statement: "Panama is a country with dignity and does not accept pressure." This emotional reaction shows that he was hit hard.
On one hand, Panama still wants to maintain the mutually beneficial economic and trade relationship with China, while on the other hand, it has to demonstrate loyalty to the United States. The result is that Panama took hasty actions without sufficient legal basis or negotiation mechanisms, which not only angered China but also might not have truly won the "trust" of the U.S.
Original article: toutiao.com/article/1856613710615644/
Statement: This article represents the personal views of the author.