Creation: Historical Materialism Group of the Proletarian Liberation Struggle Association
According to Bloomberg on Thursday (June 12), the U.S. Embassy in Panama stated that the U.S. government will cooperate with Panamanian security agencies to install seven new telecommunications bases within the next two years with “reliable American technology” to replace previously installed Huawei equipment. The project costs 7 million USD (57 million RMB) and is funded by the U.S. government. In response, China condemned this action, claiming that such behavior by the U.S. is “coercing other countries to choose sides and restricting cooperation with China,” and demanded that the U.S. stop such “hegemony” actions. The situation in Panama is complex and volatile, with both the U.S. and China, the two imperialist powers, eyeing this region closely. To explain the reasons behind this phenomenon, we need to conduct an in-depth and accessible analysis of Panama’s history and current situation.
As a small country, Panama has an area of only 75,500 square kilometers and a population of just over four million, yet it possesses a globally significant waterway—the Panama Canal. The canal generates extremely high revenue, with annual transit income reaching nearly 5 billion USD, accounting for about 1/16 of Panama’s GDP, and holds immense strategic importance. Whoever controls this canal can dominate international trade and navigation. This has made Panama a coveted prize for imperialist powers, with the most aggressive and deeply invasive being U.S. imperialism. Panama was originally carved out of Colombia by U.S. imperialists to seize the rights to build the canal. After independence, the U.S. signed an extremely unequal treaty with Panama in 1904, which stipulated that Panama would cede a ten-mile zone around the canal for U.S. permanent use, facilitating U.S. maintenance and operation of the canal. The U.S. also demanded the right to station police and troops in the canal zone and establish military bases, effectively turning the canal zone into a U.S. leased territory. Despite persistent struggles by the Panamanian people, the 1977 Torrijos-Carter Treaty finally stipulated that the canal would be handed over to Panama in 1999. However, even after regaining the right to operate the canal, Panama has not been able to free itself from U.S. imperialist control; instead, it remains heavily dependent on the U.S. in many respects. The 1978 supplementary provisions allowed the U.S. to maintain military presence near the canal and to conduct armed actions to “defend the security of the canal zone.” Moreover, in 1989, when Panama demanded the U.S. honor the 1977 treaty and restore sovereignty over the canal, the U.S. launched a brutal invasion, overthrowing Panama’s existing government. Economically, Panama is also under U.S. control: as a net importer of food, most of its supplies come from the U.S., and its domestic industry is underdeveloped, relying heavily on financial services. Most banks are controlled by U.S. interests. In 2011, Panama signed an agreement with the U.S. to exchange financial information, further deepening U.S. economic dominance over Panama.
Meanwhile, a rising imperialist power—China—has also begun to extend its colonial claws into Panama. Since Xi Jinping took power, China’s outward expansion has significantly increased, especially in Africa and Latin America, where it exports capital and exerts economic control. Controlling Panama, in particular, allows China to cut off the connection between the U.S. Pacific and Atlantic fleets, disrupting U.S. military deployment and facilitating China’s expansion into Latin America, strengthening its economic influence over the region. Since 2017, Panama has joined China’s so-called Belt and Road Initiative, becoming a target of China’s economic colonialism. Subsequently, China has used its substantial capital to control various sectors in Panama, attempting to turn Panama into a colony fully under its influence. China’s construction banks and industrial banks have established branches in Panama, supporting Chinese enterprises’ investments and trade in Latin America, and facilitating dollar flows. Between 2016 and 2020, Chinese investments in Panama’s infrastructure and real estate reached tens of billions of dollars. When Hong Kong’s Changjiang and JiJi attempted to sell the Panama Canal to foreign companies, Chinese regulators intervened, requiring buyers to undergo review by China’s Market Supervision Administration before completing the purchase, causing the deal to be suspended. This demonstrates the extent of China’s infiltration into Panama.
However, the U.S., as Panama’s political master, naturally does not allow China to intrude into its “backyard” of Latin America. The U.S. has begun to use various political means to suppress China’s influence in Panama, preventing further expansion. On February 2, 2025, under pressure from the Trump administration, Panama’s president, Laurentino Cortizo, announced that Panama would terminate its cooperation with China’s Belt and Road Initiative in 2026. Recently, the Trump administration demanded Panama replace Huawei’s information bases with U.S.-supplied bases. The U.S. Southern Command has repeatedly warned about China’s investments in critical infrastructure, including deep-water ports, networks, and space facilities, claiming these could be used for malicious commercial and military purposes. China, naturally, will not sit idly by in the face of such suppression. The Chinese Ministry of Foreign Affairs has condemned the U.S. for long-term surveillance, cyberattacks, and monitoring in Latin America and the Caribbean, which have created insecurity for the countries of the Western Hemisphere, and demanded that the U.S. cease interfering in Panama’s internal affairs. China has already carried out large-scale economic colonization in Panama, including power, railways, communications, housing, and ports, but U.S. influence remains deeply rooted, and the U.S. continues to manipulate Panama politically. Overall, Panama remains in a state of fierce rivalry between the two imperialist powers, with the U.S. holding the advantage.
However, whether the canal is controlled by China or the U.S. makes little difference to the Panamanian people—it’s just different colonial oppressors occupying what rightfully belongs to Panama. The Panamanian people have never enjoyed the benefits of the Panama Canal; its sovereignty has been either directly controlled by U.S. imperialism or fragmented under imperialist capital exports. But the Panamanian people are not willing slaves. In 1964, they launched massive protests and the “Flag Uprising” (at the time, the law required both the Panamanian and U.S. flags to be flown in the canal zone, but U.S. colonizers arrogantly only flew the U.S. flag), boldly entering the heavily guarded U.S. canal zone and raising the flag of the Republic of Panama. On April 23, 2025, to oppose the bilateral agreements that infringed on Panama’s sovereignty and the comprador government’s reactionary reforms to the pension and social security systems, the Panamanian people staged a 53-day strike, profoundly challenging the rule of the comprador government. Marxists should support the Panamanian people’s efforts to reclaim the canal—not only because the canal was built by the Panamanian people and should belong to them, but also because regaining control of the canal can cut off the connection between U.S. Pacific and Atlantic fleets, preventing China’s colonial ambitions from further extending into Latin America. The rule of U.S. imperialism and China in Panama will eventually end, and the Panamanian people will ultimately reclaim their precious wealth—the Panama Canal.
Original link: The U.S. will build telecom bases in Panama to replace Huawei equipment