More Chi­nese Firms In­vest­ing in Panama

— In­ter­view with the Pana­ma­nian Min­is­ter of Com­merce and In­dus­try Au­gusto Arose­mena

China's Foreign Trade (English) - - Top Interview - By Au­drey Guo

China and Panama signed a joint com­mu­nique on es­tab­lish­ing diplo­matic re­la­tions on June 13, 2017, which marked the es­tab­lish­ment of for­mal diplo­matic re­la­tions be­tween the two coun­tries and turned a new chap­ter of bi­lat­eral re­la­tions. By the an­niver­sary of the es­tab­lish­ment of diplo­matic re­la­tions, both coun­tries have de­vel­oped a solid eco­nomic and busi­ness re­la­tion­ship, with re­mark­able achieve­ments hav­ing been made. In a meet­ing held re­cently, the Pana­ma­nian pres­i­dent Juan Car­los Varela said that the achieve­ments and changes since China and Panama signed diplo­matic re­la­tions are very im­pres­sive.

Re­cently, the Pana­ma­nian Min­is­ter of Com­merce and In­dus­try Au­gusto Arose­mena, said in an in­ter­view with China’s For­eign Trade, that the Pana­ma­nian gov­ern­ment is proud of its good re­la­tions with China, and it was a pos­i­tive de­ci­sion made by Pres­i­dent Xi Jin­ping and Pres­i­dent Varela. Bi­lat­eral re­la­tions would en­ter a new phase of de­vel­op­ment. Re­mark­able achieve­ments based on long-term co­op­er­a­tion

The Panama Canal con­nects the Pa­cific Ocean and the At­lantic Ocean, and is the world’s most im­por­tant ship­ping routes. China is the largest sup­plier to the Colon Free Zone, and is a big user of Panama Canal sec­ond only to the U.S. China has also ranked first for many years in terms of the num­ber of ex­hi­bi­tion en­ter­prises and ex­hi­bi­tion stands at the Ex­pocomer. Since the two coun­tries es­tab­lished a diplo­matic re­la­tion­ship, both sides have suc­cess­fully co­op­er­ated with re­gards to trade, in­vest­ment, civil avi­a­tion, in­fra­struc­ture and in many other sec­tors.

“In the past year, bi­lat­eral co­op­er­a­tion has achieved pos­i­tive out­comes. For ex­am­ple, we have a pproved a fea­si­bil­ity re­port about the rail­way project link­ing Panama prov­ince and Chiriqui prov­ince. Air China has opened a new di­rect flight route be­tween Bei­jing and Panama, fa­cil­i­tat­ing in­creased ex­changes be­tween the two coun­tries. On top of that, the visa pol­icy has also been re­laxed. The for­ma­tion of the new bi­lat­eral re­la­tion­ship has made both sides reach a con­sen­sus through sign­ing the mem­o­ran­dum of un­der­stand­ing, which of­fi­cially started the ne­go­ti­a­tions of free trade agree­ment be­tween China and Panama,” said Arose­mena, when com­ment­ing on the great changes that took place through­out the past year.

Arose­mena said that the diplo­matic achieve­ments would be im­pos­si­ble without a solid back­ground of mu­tual co­op­er­a­tion in the past years. “We re­ally ap­pre­ci­ate the works done by the CCPIT be­fore and af­ter the es­tab­lish­ment of bi­lat­eral diplo­matic re­la­tions. Without their ef­forts these fruit­ful achieve­ments would have been im­pos­si­ble in the past year.” It is known that since 1975, the CCPIT has or­ga­nized ten trade ex­hi­bi­tions for Chi­nese en­ter­prises in Panama, ar­ranged re­cip­ro­cal busi­ness vis­its and trained a group of com­merce as­so­ci­a­tion man­agers for Panama to en­hance mu­tual busi­ness com­mu­ni­ca­tions. In 2018, the CCPIT or­ga­nized a train­ing ses­sion for 21 busi­ness del­e­gates of Panama. Since ear­lier this year, the lo­cal CCPIT of­fices in Zhe­jiang, Chongqing and Zhuhai have or­ga­nized Chi­nese en­ter­prises to visit Panama.

“The past year has wit­nessed ac­tive in­volve­ment of the CCPIT and Pana­ma­nian Min­istry of Com­merce and In­dus­try in trade and busi­ness pro­mo­tions. We have re­ceived busi­ness del­e­gates from each other. Now we are as­sist­ing Chi­nese com­pa­nies to start busi­ness in Panama. Dur­ing the Pana­ma­nian Pres­i­dent’s visit in China, the Pana­ma­nian Min­istry of Com­merce and In­dus­try and the CCPIT signed a mem­o­ran­dum of un­der­stand­ing, which laid a le­gal basis for our fu­ture co­op­er­a­tion.” Arose­mena is ex­pect­ing to see more co­op­er­a­tion with the CCPIT and he said, “We wel­come the CCPIT to es­tab­lish an of­fice in Panama to bet­ter pro­mote and en­hance bi­lat­eral trade and in­vest­ment.”

Since diplo­matic re­la­tions have been es­tab­lished, the Pana­ma­nian gov­ern­ment has been cor­re­spond­ing to China’s Belt and Road Ini­tia­tive and

said it would take this op­por­tu­nity and play a more im­por­tant role in ex­tend­ing Belt and Road con­struc­tion in Latin Amer­ica and con­nect­ing the Panama Canal with the mar­itime silk road. Panama was the first Latin Amer­i­can coun­try that signed the mem­o­ran­dum of un­der­stand­ing on Belt and Road con­struc­tion with China.

“We highly ap­pre­ci­ate the con­cept of the Belt and Road Ini­tia­tive, and Panama will play an im­por­tant role in the ex­ten­sion of the Belt and Road Ini­tia­tive into Latin Amer­ica.” Arose­mena gave very pos­i­tive com­ments about China’s Belt and Road Ini­tia­tive, say­ing that this ini­tia­tive will play to the strength of Panama. For ex­am­ple, the Panama Canal is highly com­pet­i­tive with many ports and sound in­fra­struc­ture, which will pro­vide con­ve­nient lo­gis­tics ser­vices for en­ter­prises. With an im­por­tant ge­o­graphic lo­ca­tion, Panama is the per­fect place for set­ting up head­quar­ters for the Latin Amer­ica re­gion. Arose­mena said that there is be great po­ten­tial for bi­lat­eral co­op­er­a­tion un­der the frame­work of the Belt and Road Ini­tia­tive . Open up free trade agree­ment ne­go­ti­a­tion to wel­come more Chi­nese in­vestors

The of­fi­cial web­site of the Min­istry of Com­merce pub­lished an an- nounce­ment on June 12 that China and Panama had signed a mem­o­ran­dum of un­der­stand­ing, which sig­naled the start of ne­go­ti­a­tion of free trade agree­ment be­tween the two coun­tries.

Arose­mena is op­ti­mistic about the free trade ne­go­ti­a­tion, say­ing that both Panama and China have con­ducted re­search about the fea­si­bil­ity of sign­ing a free trade agree­ment. The sign­ing of the doc­u­ment will be con­ducive to the bi­lat­eral trade and in­vest­ment de­vel­op­ment, and that is why Panama de­cided to sign a mem­o­ran­dum of un­der­stand­ing with China and open up the first round of talks on July 9. He thought that the sign­ing of the free trade agree­ment will not only pro­mote com­mod­ity trade, but also es­tab­lish a frame­work of mech­a­nism that will pro­mote more Chi­nese com­pa­nies to in­vest in Panama, and also ad­vance bi­lat­eral tech­no­log­i­cal and knowl­edge com­mu­ni­ca­tions. Panama will also see more ex­ports of meat, cof­fee, fruits and veg­eta­bles to China.

Now China is Panama’s sec­ond-largest trade part­ner in the world, while Panama is China’s largest trade part­ner in Cen­tral Amer­ica and 8th largest trade part­ner in Latin Amer­ica. In 2017 Panama’s ex­port to China sur­passed USD 62 mil­lion, mainly in­clud­ing pro­duce such as cop­per and al- uminium waste, aquatic prod­ucts, wood and cof­fee. On the con­trary, Panama’s im­port from China amounted to USD 6.6 bil­lion.

Many Chi­nese en­ter­prises also look to the plen­ti­ful in­vest­ment op­por­tu­ni­ties in Panama. Now more than 40 Chi­nese com­pa­nies have set up branches in Panama and in­vested in many sec­tors in­clud­ing port, road and bridge, en­ergy, whole­sales and au­to­mo­bile. These com­pa­nies made full use of Panama’s ge­o­graphic ad­van­tages to spread their busi­ness to Cen­tral Amer­ica and Caribbean area. Many Chi­nese fi­nance in­sti­tu­tions also set up of­fices in Panama to pro­mote fi­nan­cial co­op­er­a­tion.

“We sin­cerely wel­come Chi­nese en­ter­prises to in­vest in Panama. Panama is a lo­gis­tics hub, with air flight and sea trans­porta­tion reach­ing other Latin Amer­i­can coun­tries. We hope Chi­nese com­pa­nies would sell their prod­ucts and ex­pand the mar­ket here and the Panama gov­ern­ment would pro­vide fa­vor­able poli­cies in im­mi­gra­tion, fi­nance and law of la­bor. I think they could in­vest in en­ergy, lo­gis­tics, tourism, com­mod­ity trad­ing sec­tors, as these sec­tors have huge de­vel­op­ment po­ten­tial.” Arose­mena highly ap­pre­ci­ated the huge suc­cess achieved by China in in­fras­truc­tural build­ings and wel­comed Chi­nese en­ter­prises to bid for projects in Panama.

Now more than 30 Chi­nese en­ter­prises have in­vested in in­fras­truc­tural build­ing in Panama, some of which had hap­pened be­fore both coun­tries es­tab­lished the diplo­matic re­la­tions. The Mar­garet Is­land Port project be­ing con­structed by Lan­bridge Group is the first and largest Chi­nese-in­vested project in Panama. Ac­cord­ing to per­son in charge of Lan­bridge Group, each year about 35-mil­lion con­tainer cargo from China are trans­ported to the Amer­ica and the same amount of con­tain­ers will go back to China. Af­ter the project is fin­ished, it will be­come a key sea­port link­ing China and the Amer­i­can con­ti­nent. It is known that this project will cre­ate at least 2,000 jobs for lo­cal peo­ple, in­clud­ing 800 con­struc­tion jobs and 1,200 oper­a­tion jobs af­ter con­struc­tion is fin­ished.

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