On June 12, 2017, Panama announced that it had broken diplomatic relations with Taiwan, and established them with China, formally recognizing the one-China policy. Five months and five days later, on Nov. 17, Presidents Varela and Xi Jinping signed 19 accords between the two countries, including a “Memorandum of Understanding of cooperation in the framework of the Silk Road Economic Belt and the 21st Century Maritime Silk Road initiative,” {La Estrella} of Panama reported.
Varela said to Xinhua that “I’m sure that China and Panama will establish a very strong relationship, which will go well beyond the borders of both countries, and will help bring
stability and peace to the region.” Varela also emphasized that the U.S. is a strategic ally of Panama–in other words, that he sees no contradiction between the Belt and Road policy and good,
strategic relations with the U.S.
A report on Panama’s TVN-2 television on Nov. 17 pointed to the broader scope of what China is up to in the region: “China has proposed to build a new silk road. It has set its sites on Latin America. In Brazil, it has invested in bus and solar panel factories. In Argentina, it is purchasing soy and it built a rail network. In Peru, it invested in energy and aluminum; in Mexico, in auto assembly; in Venezuela, in petroleum; it also financed a bioceanic train to connect Brazil, Peru and Bolivia. A Chinese businessman also is behind the project to construct an interoceanic canal through Nicaragua; China promises Panama an unprecedented economic panorama. But it will be up to the authorities to ensure that those investments benefit all economic sectors.”
