The Chinese Are NOT Taking Over Panama

Jon Hanna, Atlasofoffshore.com, Panama

23 June 2000

The idea that the Chinese taking over the Panama Canal is a myth invented by the content-hungry US press, basically blowing up the fact that a Chinese-owned ports company won the bid to operate a couple of the Panama Canal ports when the Panama Canal was handed over to the Panamanian government by the US in 2000.

Panama has been privatizing most of its public utilities over the last 5 years in an attempt to improve efficiency, costs, profits, and service for everyone. It is well known that government-run operations are usually less efficient, more costly, less profitable, and offer worse service than privately-run operations.

Panama has privatized various government-controlled operations such as road construction, telecommunications systems, water, sewage, railroads, garbage, electricity, and ports through offering bids to major, international companies who specialize in these services. These companies have the right to operate in the area they bid on for the set time period designated by the bid (generally 5 to 20 years). For example, the British group Cable & Wireless won the bid for telecommunications systems. A Spanish company won the bid for the electricity/power systems. A US company won the bid for water and sewage systems. A Mexican company won the bid for building roads, highways, and toll roads. And finally, a Chinese company, Hutchinson Wampoa, won the bid for two of the four ports of the canal.

Hutchinson is a major, international ports company that operates ports all over the world and even operates a port in Long Beach, California. The shipping industry has changed due to the larger super tankers that no longer fit through the canal that was built in 1913 and designed to fit the ships that were built in those days. As a result, there is a need for large ports where the super tankers can dock to unload containers. The containers are carried across to the other side of the canal by train or truck. Hence the need for large and efficient ports.

The Panamanian government oversees these ports as well as all of the other utilities, having ultimate control over them. However, the Panama Canal itself will continue to be operated by the Panama Canal Authority, which is government controlled.

It is also important to note that Panama has strict employment laws which limit companies in hiring non-Panamanians to a maximum of 10% of their work force. Thus it would be impossible to flood Panama with any foreign workers. The world can therefore rest assured that the Chinese are not taking over the Panama Canal, nor does their culture influence the Panamanian financial industry.

.

Recommended

Write a comment