China Threatens Panama Over Supreme Court Port Ruling

Following the Supreme Court's ruling, China warned that Panama would “pay a high price” for the decision, calling the verdict “absurd, shameful, and pathetic,” and assured it would defend the interests of its companies abroad. Mulino explained the difference between an economy governed by the Central Committee of the Chinese Communist Party and the democratic institutions that rule in Panama. He assured that a concession for two ports will no longer be granted to a single company, and their operation will be divided among different administrators. The president also indicated that once the transition period for the ports is over, the Government will review the schemes under which the ports will be managed. China reportedly asked its state-owned companies to halt talks on new projects in Panama after the Supreme Court of Justice (CSJ) declared the contract granting CK Hutchison Holdings Ltd. the concession for the Balboa and Cristóbal ports unconstitutional, according to a Bloomberg publication. The company stated that since the beginning of this year and in recent dates, the Panamanian state disregarded communications, consultation efforts, and requests for clarity. Meanwhile, Panama Ports Company S.A. (PPC) initiated an international arbitration against Panama, considering that the decision comes after a campaign by the Panamanian state specifically aimed at this company and its concession contract. In turn, the President of the Republic, José Raúl Mulino, reiterated this Thursday that the Supreme Court's ruling is final and must be complied with. According to the report, the “Asian giant” would also have asked shipping companies to assess the diversion of cargo to other ports, as long as this measure does not imply significant costs. “Unlike China, the Panamanian Executive Branch does not interfere in the justice or the courts of justice of our country,” he assured.