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Panama opens diplomatic relations with China

Posted on 2017-06-22

Although Panama is not the first country to break diplomatic relations with Taiwan in order to establish them with China, with Costa Rica having done so in 2007, it is the only country in the region that has the necessary logistical and commercial conditions to become an ideal platform for Chinese investments.

China is the second largest user of the Panama Canal, the country's fourth largest trading partner and the largest supplier to the Colon Free Zone in the Caribbean, one of the biggest in the region.

The new political relations with Beijing will not only facilitate the flow of investments by Chinese companies to Panama and Central America, but could also open the door to starting a process of negotiation for a commercial agreement between both countries.

In 2016, Panama exported US $50.9 million worth of goods to China, 22.9% more than in the previous year, with the main products being scrap and waste copper; scrap and waste aluminum; crustaceans; Wood in the rough and longitudinally profiled; Coffee, peel, husk and coffee substitutes, among others. In the same period, the imports made into Panama were in the order of US $1,183 million.

The announcement comes days after the start of construction of the Panama-Colon container port was announced by China Landbridge Group. The new terminal, which will be located on Isla Margarita and will have capacity to service Neo Panamax ships, will require a $1 billion investment.

 

Source: Central America Data

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