Panama’s Leader Tries to Fix Shipping Disputes with China

Panama’s president, Jose Raul Mulino, visited the Balboa port last week to ease concerns about rising tensions with China. Just days earlier, Panama’s foreign minister had accused China of unfairly increasing inspections on ships flying the Panamanian flag. Mulino insisted the country doesn’t want conflict with China and hopes the issue settles quickly. When reporters pressed him on detentions of Panamanian ships in Chinese ports, he called the inspections standard practice in global shipping, pointing out similar problems have hit other major ship registries like Liberia and the Marshall Islands. While Mulino downplayed the idea of political payback, he admitted Panama is still investigating why these inspections are happening. He mentioned that Panama has formally asked China to explain its actions and confirm the legal grounds for holding ships. His softer approach contrasts with the sharper words from the foreign minister, who directly linked the inspections to a recent court ruling against a major port operator.Last month, U. S. officials also noticed the spike in detentions and warned it was abnormal compared to past trends. The foreign minister had argued the inspections were China’s way of reacting to a Panama Supreme Court decision that stripped CK Hutchison of its rights to run key port terminals. That decision came after years of legal battles over a 1997 contract, which China opposed. The conflict isn’t just legal—it’s economic too. The Panama Canal handles one-twentieth of the world’s shipping trade, making it a critical global route. Meanwhile, the company that lost control of the terminals, CK Hutchison, claims Panama unlawfully took its property and is demanding over $2 billion in damages through international arbitration. Mulino stayed quiet about a new arbitration case involving another shipping giant, Maersk, which now temporarily runs the terminals.