International Trade between Panama and China
Trade between Panama and China has become increasingly close, and the two sides have cooperated extensively in a number of areas. The following is a detailed analysis of trade between Panama and China:
1. Trade Background
Located in Central America, Panama has a unique geographical advantage, namely the Panama Canal, which connects the Atlantic and Pacific Oceans. This strategic location not only makes Panama an important hub for international shipping and logistics, but also brings it rich natural resources and a diversified economic structure. As the world's second largest economy, China has great potential and room for development in its trade relations with Panama.
2. Development of Trade Relations
Diplomatic relations history:
In June 2017, Panama established diplomatic relations with China, becoming the first country in Central America to establish diplomatic relations with China.
In 2018, China and Panama signed a free trade agreement (FTA), the first FTA signed between China and a Central American country.
Trade growth:
Since the establishment of diplomatic relations, bilateral trade between China and Panama has continued to grow. For example, bilateral trade reached US$11.344 billion in 2021, up 22.5 per cent year-on-year.
China has become Panama's number one trading partner, the number one supplier to the Colón Free Trade Zone and the second largest user of the Panama Canal.
3. Trade Structure
Main commodities exported from China to Panama:
Mineral fuels, mechanical appliances, electronic equipment, ships and other products.
Main commodities imported by China from Panama:
Ore, feed, meat and other products.
4. Investment and Cooperation
Chinese direct investment in Panama:
By the end of 2021, the stock of Chinese direct investment in Panama was US$1 billion.
Chinese enterprises in Panama mainly include Bank of China, Industrial and Commercial Bank of China, China Harbour, China Electric Construction, COSCO Shipping, China Railway Bureau, Gezhouba Group, Huawei, ZTE, etc., covering the fields of telecommunication, infrastructure construction, housing construction, energy development and trade.
Co-operation Projects:
Panama signed a memorandum of understanding on ‘Belt and Road’ cooperation with China, becoming the first country in Latin America and the Caribbean to do so.
The two sides have signed cooperation agreements on e-commerce, trade in services, infrastructure construction and other areas.
5. Trade Prospects and Challenges
Prospects:
With the deepening of China-Panama relations and the implementation of the FTA, trade exchanges between the two sides will become more convenient and the areas of cooperation will be further broadened.
The Panamanian government is actively promoting economic reform and infrastructure construction, which provides more opportunities for Chinese enterprises to invest in Panama.
Challenges:
The uncertainty of the global economic situation may have some impact on China-Panama trade.
Both sides need to strengthen cooperation in trade facilitation and intellectual property protection to address potential risks and challenges.
In summary, trade between Panama and China has broad prospects for development and great potential. Both sides should continue to strengthen cooperation, promote trade and investment liberalisation and facilitation, and work together to address global challenges for mutual benefit and win-win results.
