China’s growing global influence extends beyond its borders, and the so-called “Panama Strategy” serves as a crucial component of its broader geopolitical ambitions. By leveraging strategic trade routes and infrastructure, Beijing is seeking to reshape the global order to its advantage. The Panama Canal, a vital waterway legally controlled by Panama but influenced by Chinese investment, has raised significant concerns about the militarization of this global trade artery.
The Panama Canal is not only crucial to international trade, but also a symbol of China’s expanding reach. While the United States remains its largest user, China is second in terms of gaining disproportionate control over this critical shipping lane. Critics argue that China’s growing control has already led to higher costs for U.S. shipping and is undermining the neutrality that Panama once secured under the 1978 U.S.-Panama Treaty. The Trump administration has expressed concern that China’s actions violate these treaties, highlighting the growing intersection of China’s economic power and its geopolitical leverage.
This “Panama Strategy” is a key component of China’s broader Belt and Road Initiative (BRI), which is investing in infrastructure projects around the world. These projects often burden countries with massive debt burdens, giving Beijing leverage over their economic and political decisions. In Latin America, this approach has already deepened China’s influence, eroding the sovereignty of nations, and shifting the global balance of power away from U.S.-dominated institutions.
Beyond Panama, China’s maritime ambitions extend to contested regions such as the South China Sea, through which more than $3 trillion in global trade moves annually. Through militarized artificial islands, Beijing is challenging U.S. security commitments in the region, stoking tensions with allies such as Taiwan, Japan, and South Korea. These actions threaten the open seas doctrine that has governed global trade and security since World War II.
Strategic chokepoints such as the Straits of Malacca and the Suez Canal are also in China’s sights. Beijing’s investments in these regions offer a potential boost to global oil and trade flows. The same strategy can be seen in the Persian Gulf, where China has formed a partnership with Iran, and controls another crucial shipping lane – the Strait of Hormuz.
China’s strategy revolves around four main pillars: economic dominance, military dominance, unchecked geopolitical influence, and energy security. The Chinese Communist Party (CCP) is seeking to dismantle the rules-based international order and replace it with a system that favors Beijing’s rule. From Panama to the South China Sea, each strategic investment is part of a long-term effort to position China as the world’s preeminent power.
Critics warn that this expansion comes with risks, particularly in terms of breaking international treaties, eroding sovereignty, and increasing the potential for military conflict. The United States and its allies face an urgent challenge in countering China’s influence—not just through military and economic means, but also by reaffirming global principles of free trade, open seas, and the rule of law.
China’s “Panama Strategy” is a stark reminder that its ambitions are not limited to domestic policies, but are aimed at reshaping the world according to an authoritarian vision. For democracies around the world, the response is clear: vigilance, strategic alliances, and a commitment to openness and fairness will be key in countering China’s growing influence.
