There was talk of a high-speed railway that China would build in Panama. New subway line in Panama City. A modern container port.

China has been working for years to build ties and influence in Panama, as part of its broader ambition to expand its footprint in Latin America. The efforts had some successes, but also a lot of failures.

In 2017, China scored a major victory when Panama severed diplomatic ties with Taiwan, a self-governing island that China considers its territory, and instead recognized Beijing. Panama was one of the few countries in the world that recognized Taiwan as a sovereign state.

The following year, Panama became the first Latin American country to sign the Belt and Road Initiative, Chinese leader Xi Jinping’s global infrastructure program aimed at increasing China’s geopolitical power and countering American influence.

Promises

A series of ambitious promises followed. China has proposed building a 250-mile high-speed rail line from Panama City, the capital, to the western border with Costa Rica. He offered to help build a new subway line in Panama City. A consortium of Chinese companies, led by conglomerate Landbridge, has begun development of what it promises will be the most modern container port in Panama.

A Chinese state-owned company also won a $1.4 billion contract to build a fourth bridge across the Panama Canal. In the end, the two countries said they would negotiate a free trade agreement.

Beijing has made it clear that it wants to solidify its support in Panama City. In early 2018, a visiting Chinese official told then-President Juan Carlos Varela that “the establishment of diplomatic relations with Panama was the most important diplomatic achievement for China in 2017.” according to press release of the Panamanian government. Later that year Mr. Xi became the first Chinese leader to visit.

China has also stepped up its soft power efforts, opening a Confucius Institute to promote Chinese culture and language and donating health supplies during the Covid pandemic.

Failures

But as China’s influence grew, so did caution among Panamanians, as did pressure from the United States to distance Panama from Beijing. After Mr. Varela left office, his successor, Laurentino Cortizo, suspended the proposed railway project. Trade negotiations are at a standstill.

Government of Panama revoked Landbridge’s rights to the container port project in 2021, after an audit found the company had breached the terms of its contract, investing less money and employing less local labor than promised.

However, China has also had some successes. The new Panamanian president, José Raúl Mulino, revived the railway idea, and Chinese diplomats and companies became clear that they want to participate. Construction has continued on the fourth bridge over the Panama Canal, after the break.

In 2021, the Hong Kong company CK Hutchinson received a 25-year extension of control over two ports at the entrances to the canal.

CK Hutchison is a publicly listed conglomerate whose largest owner is a family of Hong Kong billionaires. It is not a Chinese state-owned company. But Beijing has tightened its grip on Hong Kong in recent years and has the power to force private companies to comply with its demands in the name of national security.

Panama has been the focus of particular Chinese attention because of the canal and past ties to Taiwan, but China is also working to expand its influence in Latin America. It positioned itself as an alternative to the United States in global leadership, presenting itself as another developing country more attuned to the needs of such nations.

Beijing has also invested heavily in Peru, opening a new Chinese-funded port in November in a city 40 miles north of Lima. China is South America top trade partner and the second largest, after the United States, for Latin America as a whole.

Go forward

In response to President-elect Donald J. Trump’s accusations, Chinese officials have denied having any interest in undermining Panama’s sovereignty or adapting it to their own interests against Washington. They have he said that China will always respect the canal as a permanently neutral international waterway.

Chinese scholars have denounced US concerns about Beijing’s growing presence in Latin America as a smear campaign.

Zhou Bo, a retired colonel in the People’s Liberation Army of China who is now a senior fellow at the Center for International Security and Strategy at Tsinghua University in Beijing, said Mr. Trump’s recent statements about China’s military presence in Panama were so absurd that they “do not deserve a concrete response ” from Beijing.

“China has many investments around the world. They’re not limited by region or whether it’s supposed to be ‘America’s backyard,’” he said.

Cui Shoujun, director of the Research Center for Latin American Studies at Renmin University in Beijing, expressed confidence that China-Panama relations will continue to grow, despite US efforts to disrupt them.

Mr. Trump might even push Panama closer to Beijing, he added. “You have an extremely domineering American president and a pragmatic Chinese partner,” he said. Faced with that choice, he said, “the answer suggests itself.”