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Panama recognized China under the 'One China' policy in 2017 and has now signed 19 accords in the areas of banking, infrastructure, and trade, during Xi's visit.
On Monday, the presidents of Panama and China met in the Central American country and signed 19 trade agreements in the areas of infrastructure, banking, and tourism, among others, signaling the strengthening of relations after both nations established diplomatic relations last year.
Some of the key accords signed were among the National Bank of Panama and the China Development Bank (CDB) in the area of finance, as well as with the Bank of China (BOC) on strategic cooperation, and between the Electric Transmission Corporation (ETESA, for its acronym in Spanish) and the China Export & Insurance Corporation (SINOSURE, for its acronym in Spanish) in the area of infrastructure.
Accords were also established on sea and tourism, as well as on multiple entry visas for ordinary passport holders.
Both countries subscribed memorandums of understanding (MoUs) for trade of electric manufactured electronic products and services, protocols for pineapple, meat, and seafood products, as well as on environmental issues, radio, television, education, culture, science, and technology cooperation, and, economic, technical, and human resource innovation.
Also, both countries signed an agreement on non-reimbursable aid to Panama, the amount of which is not known.
Outside of strategic development-related accords, the two countries also signed a mutual-extradition agreement — the legal framework of the accord sets the penal guidelines for the proceedings — and started preparations for the China-Latin America and the Caribbean (2019) business summit.
As of April 2018, Panama’s main trading partners are China (US$6.34 billion), the United States (US$6.12 billion), Japan (US$5.66billion), Singapore (US$4.91billion), and Colombia (US$1.91 billion).
On Jun. 12, 2017, Panama officially reestablished diplomatic relations with China, and, in doing so ended relations with Taiwan, following the Asian giants' ‘One China’ policy.
Even before this, China had been an important economic partner to the Central American nation and the second top user of the Panama Canal.
The United States has been weary of the strengthening of relations among both nations, particularly over the cessation of relations between Panama and Taiwan.
Allegedly the White House believes China is using incentives to mobilize policy in its favor.
This complaint shows a direct affectation both to the U.S.' geopolitical interests in Asia, as well as what it has called it's 'backyard,' referring to Latin America and the Caribbean.
The intensification of China-Panama relations are a slap in the face to the North American nation, which used to have full leverage over Central American politics.