Recently, the Panamanian Supreme Court unilaterally invalidated the contracts of Hong Kong's CKI (Cheung Kong Infrastructure) to operate two ports near the Panama Canal on the grounds of "unconstitutionality," which has led to strong opposition from the Chinese Ministry of Foreign Affairs and the Hong Kong Special Administrative Region Government.

However, this incident is not a simple commercial dispute but a precise strike by the United States against China's overseas interests under its global strategic adjustment. From a broader perspective, Panama's actions under U.S. influence that harm China's interests are merely the first step in America's "three-layer containment" strategy to curb China's development.

For China, it is necessary to re-understand the new landscape of Sino-U.S. competition and systematically build a comprehensive response system in three dimensions: countermeasures, geopolitical breakthroughs, and strengthening capabilities.

Container ships loading cargo at Balboa Port, Panama Canal

The U.S. "Three-Layer Containment" Strategy

According to data provided by the British think tank International Institute for Strategic Studies (IISS), the Panama Canal, as a global strategic waterway connecting the Pacific and Atlantic Oceans, handles about 5% of global maritime trade on an annual basis.

Especially for the United States, approximately 40% of its container shipments each year pass through the Panama Canal. Therefore, the contest over its operating rights is a focal point of great power rivalry. Panama's actions, which appear to be using legal means to "protect national sovereignty," are essentially an act of "taking sides" in America's strategy to contain China.

Container ships passing through the Americas Bridge on the Panama Canal

Eight years ago, in 2018, during Trump's first term, the U.S. government first identified China as a "competitor" in its State of the Union address. Subsequently, the U.S. gradually introduced containment strategies targeting China in areas such as trade, finance, technology, and geopolitics. However, after eight years, neither tariffs, technological blockades, nor geopolitical encirclement have truly succeeded in containing China.

In October 2025, after his second term, Trump met with Chinese officials in Busan, South Korea, and the U.S. announced a reduction in tariffs on Chinese goods and the suspension of several containment strategies against China. This event marked the failure of the previous two U.S. administrations' policies toward China.

Nevertheless, we must clearly recognize that the shift in the U.S. attitude does not mean abandoning the strategy of containing China, but rather a change in the method of containment. Whether in the leadership or the civil society, the U.S. has fully recognized that China's hard power is difficult to stop.

A renowned U.S. think tank, the Carnegie Endowment for International Peace, released a survey report in early January showing that nearly two-thirds of Americans believe China's strength is now equal to or exceeds that of the U.S. In crucial economic fields, German media "Table.Media" reported in mid-January that in the first half of 2025, Chinese capital accounted for 10% of global investment flows, making China the largest overseas investor in the world.

U.S. Secretary of State Rubio visiting Panama

Under these circumstances, the U.S. cannot defeat China on the "front battlefield" of comprehensive national strength, so it resorts to a "three-layer containment" strategy of controlling resources, key routes, and intermediate markets to indirectly hinder China's development.

The more China develops economically and improves its industrial system, the more dependent it becomes on overseas resources, key shipping routes, and intermediate markets. The U.S. can use its "existing hegemony" to influence international commodity export markets, shake the internal politics of energy exporting countries and key geographical regions, thus transforming the dominance of the global order into a "geopolitical weapon" to curb China's development.

This case of Panama's betrayal is a typical example. In the future, similar events may frequently occur in places like the Strait of Malacca, the Strait of Hormuz, and the Suez Canal. Additionally, critical resources in fields such as China's new energy and AI computing power, such as copper, cobalt, and lithium mines in Africa and South America, will also become targets of U.S. interference, thereby doing everything possible to hinder China's industrial upgrading.

Thus, the U.S. can avoid direct confrontation with China, using its existing advantages to erode China's overseas interests that have been expanding in recent years. The use of such rule-based weapons will become the new norm in Sino-U.S. competition.

China's Dual Countermeasures

A worker parking a truck next to containers at Balboa Port

Facing increasingly complex situations regarding the protection of overseas interests, China currently needs to adjust its mindset most urgently. Over the past few decades, China's development mainline has been economic construction, and foreign investments were mainly economic interactions, with little political influence abroad. However, the current situation has changed significantly. With China's overseas investments gradually surpassing those of the U.S. and increasing overseas interests, we need practical policies to protect our interests from being harmed.

Especially in the face of the U.S. often exerting geopolitical influence to contain China, we must change the past approach of not proactively interfering abroad. Of course, this does not mean that we will emulate the U.S. in interfering in other countries' internal affairs, but rather focus on protecting our overseas interests. In short, the era of "defending gentlemen but not small men" has passed. In the future, our main adversaries will be "small nations."

Chinese sailors on the Panama Canal

In this Panama port issue, China has indeed pioneered a new model of "economic + political" dual counterattack. First, it gradually escalates diplomatic statements. For this, CNBC, an American consumer news and business channel, analyzed the process of escalation in Chinese diplomatic language in a report on February 4th.

Initially, the Chinese Ministry of Foreign Affairs stated on January 30 that the ruling "contradicts the laws under which Panama approved the relevant franchise rights," and that companies would retain all rights including legal procedures, and that China would take all necessary measures to firmly safeguard the legitimate rights and interests of Chinese enterprises.

Then, on February 3rd, the State Council's Hong Kong and Macao Affairs Office criticized Panama's ruling as "absurd" and "bowing to hegemony and aiding the tyrant," warning that "if one persists in their ways and remains stubborn, they will pay a heavy price both politically and economically." Previously, official Chinese diplomatic warnings were often dismissed by the involved countries, which was the result of long-term Western media propaganda.

However, this time is different. Multiple foreign media quickly found that China, while escalating its diplomatic language, immediately followed up with concrete countermeasures. According to Bloomberg on February 5th, China is taking extensive countermeasures against Panama's ruling. It is even rumored that China has requested state-owned enterprises to suspend negotiations on new projects with Panama and simultaneously assess further response measures in trade and shipping sectors.

February 4, containers stacked at a Panama port company

According to U.S. media analysis, this move could block potential investments worth billions of dollars. In fact, such a statement is not baseless; China currently has a significant impact on Panama's economy.

According to data from the United Nations as of 2024, China became the largest trading partner of Panama after 2019. It can be said that the Panama Canal, as a global strategic waterway, needs the contribution of Chinese investment to maintain its prosperity.

Analyzing further, all key infrastructure projects in Panama, including canals, bridges, tunnels, and railways, are entirely reliant on Chinese enterprises. As a tropical country, Panama's main export partners for important agricultural products such as bananas and coffee are also China. Therefore, Panama is unable to withstand the pressure of a full-scale Chinese sanction.

Certainly, similar cases are not limited to Panama alone. As the engine of global economic growth, China brings a strong demonstration effect to other countries and regions. A small country can achieve rapid economic development in a short period by riding on the "tailwind" of China's economic development. Conversely, if it aligns with the U.S., it will face severe economic losses and trade isolation. For some key small countries, this is sufficient to understand the weight. Moreover, the U.S. globally implements a tough isolationist policy, which may not be welcomed by many developing countries, thus creating opportunities for China to increase its international influence while others decrease.

Breaking Geopolitical Constraints with a Bottom-Line Mindset

Suez Canal

Although China's overall national strength continues to rise, and its global voice is becoming heavier, the methods of countering external anti-China forces have become more diverse and effective. However, in the current international situation, the U.S. still has stronger global control capabilities. Key waterways like the Panama Canal still face the risk of being blocked, and China needs to accelerate the layout of diversified trade channels and break through the constraints of geopolitics with a bottom-line mindset.

The so-called bottom-line thinking is to reduce excessive reliance on single trade nodes, single international waterways, or single resource import countries. When analyzing these critical international waterways, their formation objectively depends on the structure of geographic blocks and cannot be easily rewritten by human efforts. The Panama Canal, Suez Canal, Strait of Malacca, and Strait of Hormuz mentioned above belong to this category.

These waterways, if they are to be bypassed, will inevitably incur huge economic costs. Some are even impossible to bypass due to geographical factors, leaving only one route to choose. Facing such a situation, we must make post-hoc compensations through human efforts.

the narrowest part of the Gaillard Channel, Panama Canal

There are many similar cases. For instance, after the outbreak of the Israel-Palestine conflict in October 2023, merchant ships passing through the Red Sea became targets of attacks by the Houthi rebels in Yemen in the following years. Several major commodity companies and shipping companies announced plans to completely avoid the Red Sea area, choosing to detour via the Cape of Good Hope to ensure the safety of crew members, goods, and vessels. This is an example of the bottom-line thinking of prioritizing economic cost over cargo safety.

Of course, there are also examples of altering nature. Due to abnormal global climate conditions, the Panama Canal faced a severe drought in 2023, forcing it to implement a months-long navigation restriction. If ships were to detour around the southern tip of South America, it would take much longer, and many cargo shipments could not wait. Therefore, Danish shipping giant Maersk adopted a more "retro" approach, unloading cargo at both ends of the canal and transporting it via rail through the Isthmus of Panama. Although this increased costs, it ensured the timeliness of transportation.

Arctic Route

The above two cases can serve as references for China to solve problems. Considering the importance of the Suez Canal and the Strait of Malacca to China's foreign trade, if similar cases occur in these regions, they may cause serious impacts on China's economy in emergency situations. Therefore, it is necessary to advance the development of the Arctic shipping route and the optimization of the Southeast Asian land-sea corridor simultaneously, north and south.

Especially with the global warming, the ice-free navigation time of the Arctic shipping route has been extended. China and Russia have common interests in jointly investing in the construction of coastal refueling, supply, and rescue infrastructure. Focusing on overcoming key technologies such as polar shipbuilding, ice navigation, and polar communication.

At the same time, cooperation with Nordic countries such as Norway and Finland can be strengthened, discussing a cooperation model of exchanging resources for channels to enhance China's voice in setting rules in the Arctic region. This measure will effectively avoid risks that the Suez Canal may cause, turning the Arctic shipping route into a reliable backup route.

Kra Isthmus

As for the problem of the Strait of Malacca, the first thing is to reassess the Thailand Canal project. New geological exploration and social impact assessments should be carried out in the Kra Isthmus area, and cooperation on upgrading land transport corridors with Cambodia and Myanmar should be synchronized.

Especially, using the China-Laos Railway as the backbone, accelerating the railway connection with the Eastern Economic Corridor (EEC) of Thailand. In this way, even if the Kra Canal is difficult to implement, railway transportation can be used to offset the risks that the Strait of Malacca may encounter, referencing the real case of Maersk Company.

Consolidating the Foundation to Enhance Hard Power

076-type Sichuan Ship

Finally, we must admit that whether it is political or economic countermeasures, or the use of bottom-line thinking to hedge against potential risks, they are essentially passive responses to the U.S. strategy of containment. In the long run, the fundamental way to break the encirclement lies in enhancing comprehensive national strength, especially converting existing economic strength into the ability to set rules and project strategic power.

Therefore, in terms of hard power building, three dimensions need to be broken through. First, the enhancement of long-range support capabilities, accelerating the construction of a network of overseas support bases with comprehensive replenishment, medical rescue, and emergency repair functions, and accelerating the construction of long-range strike forces centered on aircraft carriers and amphibious assault ships, which is the foundation for enhancing international power projection. Now, the commissioning of the Fujian Carrier and the Sichuan Amphibious Assault Ship represents our country's direction of development in this regard.

Secondly, implementing a supply chain security project at the national level, establishing effective, safe, and controllable transportation channels and reserve bases for strategic materials such as oil, ore, and grain, and widely exploring alternative sources to ensure that core material supplies remain uninterrupted even if any single channel is interrupted. This can be considered the "ballast stone" for safeguarding China's economy.

Finally, we need to actively go outwards and promote Chinese standards becoming international or regional standards in advantageous fields such as high-speed rail, ultra-high voltage, 5G, and new energy, showcasing China's ability to build a new order and retaliate against and sanction opponents, breaking the illusion of certain countries "low-cost provocations." Ultimately achieving a strategic transformation from "passively responding to challenges" to "proactively shaping the environment."

Original source: toutiao.com/article/7603946624737427983/

Statement: The article represents the views of the author.