A cargo ship sails past the Panama Canal’s Port of Balboa, managed by CK Hutchison Holdings, in Panama City on March 13, 2025. THE ASSOCIATED PRESS
THE WATCH STAFF
Panama has notified China that it is pulling out of its One Belt, One Road (OBOR) initiative, the communist country’s expansive infrastructure and investment program. Panama was the first Latin American country to join OBOR, in November 2017, and now it is the first to leave.
On February 6, 2025, Panama’s government notified China of a 90-day notice of withdrawal from OBOR, Newsweek reported. Panamanian President José Raúl Mulino said the decision was made before U.S. Secretary of State Marco Rubio visited Panama on February 2.
OBOR is a global infrastructure development scheme adopted by China in 2013 to invest in more than 150 countries in the hopes of winning global influence. But in recent years, some countries have reconsidered their participation due to worries about overwhelming debt, Chinese influence and corruption, and sovereignty. Scholars and news outlets have documented Chinese organized crime activity in some OBOR countries.
In addition, some observers say the initiative has lost momentum. “China strongly insisted on the [OBOR], but now that we are experiencing political and economic changes in the region, countries are taking a closer look at the Chinese narrative around this initiative, which has lost steam,” Sergio Cesarin, coordinator of the Center for Studies on Asia Pacific and India at the National University of Tres de Febrero in Argentina, told Diálogo Americas, a magazine published by U.S. Southern Command. “Many countries that are part of [OBOR] are seeing how promised investments have become scarcer.”
Estonia, Italy and the Philippines also have withdrawn from the program in recent years. “While some countries may choose to renew agreements with China, others are rethinking their participation. Colombia, which at one time considered joining [OBOR], may not do so. Brazil has already said no. We are seeing a new configuration in the region, where alliances are being reviewed,” Cesarin told Diálogo.
On March 4, Hong Kong-based conglomerate CK Hutchison Holding announced it had agreed to sell a controlling stake in a subsidiary that operates Panama Canal ports to a consortium led by BlackRock Inc., effectively putting the ports under U.S. control. The deal is valued at nearly $23 billion, including $5 billion in debt. The deal will give the BlackRock consortium control over the ports of Balboa and Cristobal, at either end of the Panama Canal. The transaction awaits approval by Panama’s government.
CK Hutchison’s operations of the Balboa and Cristobal terminals have raised security fears in the U.S. In January 2025, before the deal was announced, U.S. Sen. Ted Cruz voiced concerns that China could block passage through the canal and that the ports “give China ready observation posts” to take action. “This situation poses acute risks to U.S. national security,” he said.
Recent events could signal a course change for China’s strategy in Latin America and an elevation of Panama’s place in geopolitics. “Now begins China’s desperate search for an alternative canal to the Panama Canal,” Cesarin told Diálogo.