Maritime link forges trade between Panama and China

China has become the second largest customer of the Panama Canal, opening the gateway to the Asian market for Panamanian products.

Trade between China and Panama is 99% in favor of Chinese sales in the Panamanian market, while Panama’s exports total about $40 million, said Wang Jian, deputy representative of the Office of Business Development of China in Panama, speaking to Elpais.com.

CFZ imports from China exceeded $11,000 million

CFZ imports from China exceeded $11,000 million.

Panama has no diplomatic relations with China and remains a strategic partner of the Chinese Nationalists of Taiwan in Latin America and the Caribbean, maintaining this as an old regional political and economic platform to counter international isolation of Taipei. But the annual business between mainlanders and Panamanians are billionaire sums and they are connected to the powerful Colon Free Zone (CFZ), the second largest free port for re-export of the world’s most important commodities, and the Panama Canal, which moved more than 50% of trade on the main route between centers of production and consumption: from Asia to the US east coast.

“China is the largest supplier of goods to the Colon Free Zone,” said Wang Jian in a telephone interview with the newspaper El Pais of Spain.

Chinese ships use the Panama Canal regularly

Chinese ships use the Panama Canal regularly.

CFZ imports from China exceeded $11,000 million, Wang said and the figures showed China’s priority in the total imports of the Zone, and in 2012 they were more than $14,500 million, according to figures from the Free Zone without specifying the amount for 2013, in a duty free area that invoices over $30,000 million a year.

Wang said that 99% of trade between China and Panama “equals Chinese sales to the Panamanian market. Panamanians hardly export anything to the Chinese market. Their exports only add up to about $40 million a year.”

A vital element of China’s involvement in business in and from Panama is the operation of the Bank of China, one of the 91 banks mainly from America, Europe and Asia that operate in Panama’s International Banking Center, installed in 1970 and to which the Chinese bank was incorporated in 1994.

Figures from the Panama Superintendence of Banks showed that the liquid assets of the Bank of China in the Centre increased from $536.7 million in 2012 to $651 million in 2013, with a positive variation of more than $114.3 million.

In the intense business movements, China has established itself in recent years as the world’s second largest customer of the Canal, surpassed only by the United States, with 137.6 million long tons of cargo flowing to and from US ports in 2013.

According to what the Panama Canal Authority (ACP) reported to El Pais, more than 46.4 million long tons were moved to and from China, compared with the previous year, in ships with Chinese flags or vessels of other nations.

Chinese vessels crossing the Canal in that period carried more than 3.7 million long tons, with an average of over 34,000 tons per ship, according to the official count.

One of the keys to the Chinese presence in Panama is the flow of cargo from China through the Canal to the east coast of the US, which totaled 10.9 million long tons in 2013. The amount is carried on the most important route: Asia – East Coast of the United States through the Panamanian waterway, which came to 24.1 million long tons last year, with users such as South Korea (6.3 million), Japan (3.9 million) and Taiwan (1.2), among other area customers.

Shipments from China to the east coast of Central America through the Canal totaled 1.2 million long tons in the same period, while those sent to the east coast of South America reached 1.2 million. To the Caribbean they surpassed 800,000 and to Canada they were just over 58,000.

China also uses the Canal for much of its business with Europe and the Middle East. The report of the ACP revealed – without specifying destinations – that last year 14.4 million long tons were shipped from Chinese ports to the Middle East by the canal route, while the total shipped to Europe by the inter-oceanic waterway just reached 182,000 long tons, with Italy as the main destination (73,000), followed by the United Kingdom (46,000), Spain and Portugal (9,000), and more than 46,000 to the other European countries.

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