The Panamanian Supreme Court's ruling on January 29 invalidating the contract allowing CK Hutchison Group, based in Hong Kong (China), to operate 2 key ports at both ends of the Panama Canal has closed a month witnessing a series of strategic developments related to or affecting Beijing in Latin America.
In early January, the US campaign in Caracas arrested Venezuelan President Nicolás Maduro. Previously, the US imposed tariffs of up to 50% on many Chinese exports to Mexico. Last week, the US canceled a large-scale zinc project of a Chinese consortium in Bolivia.
The White House has begun to set conditions for developing Venezuela's huge oil reserves in a direction that benefits US companies, thereby potentially affecting the position of Chinese businesses here.
In Bolivia, the decision to cancel the zinc project shows a reassessment of the benefits of Chinese investment, while reflecting the changing geopolitical priorities in this country.
The ruling in Panama alone is seen by the media as the heaviest blow. The Panama Canal is still one of the most important strategic infrastructure assets in the world, handling about 5% of global trade.
China is the country that uses this waterway route the second most, after the US, and has secretly built a chain of assets around the canal even though the canal is still under independent control of the Panama Canal Authority.
Bloomberg commented that not only losing 2 ports, China also lost the achievements built in Panama after many years of patiently expanding its influence since the two countries re-established diplomatic relations and Panama severed relations with Taiwan (China) in 2017. Panama is also the first Latin American country to participate in the Belt and Road Initiative.
However, China has not lost its foothold in Latin America. Panama is cautious in ensuring the neutrality of the canal and plans to maintain the reliability of the logistics chain until new concessions are bid.
In a broader scope, China will continue to seek to penetrate the region through trade cooperation, political alliances and soft power, taking advantage of huge trade links, especially in South America.
According to the latest strategic white paper released in December 2025, the Chinese government still pursues an ambitious cooperation program spanning from trade, infrastructure, finance, energy, manufacturing, food to technology.
However, the Panamanian court ruling this week is another sign that geopolitical competition in Latin America is heating up and the advantage is not necessarily leaning towards China.
