Is China in Control of the Panama Canal?

A Chinese company with close ties to the Beijing Communist government was planning to take over the operation of the Panama Canal, a secret government report revealed.

And according to Adm. Thomas Moorer, with facilities at both ends of the canal and an agreement with the Panamanian government, Hong Kong-based Hutchison Whampoa Ltd. has the ability to all but control the strategic waterway.

The company has long-term 25-year leases on the ports at each end of the Canal. They are run by the Panama Ports Co., a Hutchison Whampoa subsidiary.

Last November President Clinton almost let the Chinese cat out of the bag when he appeared to agree that the Chinese firm would be running the canal, but after his staff realized the extent of what he’d revealed, he pulled back, saying that he’d “misstated this.”

Asked by a reporter, “You’re not worried about the Chinese controlling the Canal?” Mr. Clinton replied: “I think the Chinese will, in fact, be bending over backwards to make sure that they run it in a competent and able and fair manner…. I would be very surprised if any adverse consequences flowed from the Chinese running the canal.”

The following day, December 1, Los Angeles Times staff writer Norman Kempster wrote that “Clinton administration officials were aghast at the president’s use of the phrase ‘running the canal,’” which confirmed what Adm. Moorer and his allies were charging. ” On December 9, Mr. Clinton stated that his reference the previous week to China “running the canal” was a “misstatement.”

The release of the report is sure to give impetus to congressional efforts to nullify the treaty that handed the canal over to Panama — a treaty which Rep. Helen Chenoweth-Hage (R-Idaho) insists is not binding on the United States.

The Army intelligence report declassified after a Freedom of Information request from Judicial Watch, a conservative public interest law firm, flatly contradicted Clinton’s claim and those of the Panamanian government that the company would have no role in the operation of the canal, a fact easily dismissed in the light of an agreement between Hutchison Whampoa and Panama that gives the company the right to choose the pilots who take the ships through the canal.

“It’s one more piece of evidence that the Clinton administration was lying about Communist Chinese intentions in Panama,” Judicial Watch President Tom Fitton told the Washington Times.

According to the April 22, 1998, intelligence report, an article from the Defense Intelligence Agency intelligence information service headed “Panama: China Awaits U.S. Departure” stated “Li Ka-shing, the owner of Hutchison Whampoa Lt. (HW) and Cheung Kong International holdings Ltd. (CK) is planning to take control of Panama Canal operations when the U.S. transfers it to Panama in December 99,”

“Li is directly connected to Beijing and is willing to use his business influence to further the aims of Chinese government,” the report states. An army intelligence analyst is quoted in the report as noting that “Li’s interest in the canal is not only strategic, but also a means for outside financial opportunities for the Chinese government.”

Congressional efforts to throw the treaty out are spearheaded by Rep. Chenoweth, who told The New American magazine:

“The Panama Canal issue is far from over. The 1977 treaties under which the transfer has taken place are still invalid, and the security problems presented by the Communist Chinese and the Colombian drug lords have not gone away. We cannot even begin to expect Panama to have near the capacity and ability to deal with these powerful entities and threats to the Western Hemisphere.

“We can either sit around and wait for something bad to happen, and then react, or we can take pre-emptive measures now, restoring the security of the region and functioning under valid law.

“We must as a Congress declare that these treaties are already, in fact, null and void, and are now being officially terminated. In so doing, Congress will send a signal to Panama that we must re-establish the strength and authority of the United States for this critical area. That is what House Joint Resolution 77 accomplishes, and I intend to continue to strongly push this legislation in the upcoming year. In fact, as more and more members of Congress learn about the seriousness of this issue, the momentum of this bill will steadily increase — and I anticipate it being a major issue in the presidential and congressional campaigns this year.”

Adm. Moorer, in an August article in The New American, wrote:

“The Chinese penetration of Panama has been effected primarily through an entity known as the Panama Ports Company, a front corporation for Hutchison-Whampoa Limited, a Communist Chinese-controlled company owned by Hong Kong billionaire Dr. Li Ka-shing. Dr. Li’s business empire has long been intertwined with enterprises that front for the Communist military and intelligence arms of the People’s Republic of China. Ten percent of his Panama Ports Company is owned by China Resources, the commercial arm of China’s Ministry of Trade and Economic Cooperation.

“Two years ago, on July 16, 1997, Senator Fred Thompson (R-Tenn.) was quoted in the South China Morning Post as stating that China Resources was ‘an agent of espionage — economic, military, and political — for China.’ Shen Jueren, the Communist official who heads China Resources, and Li Ka-shing are both partners in the Riady family’s Hong Kong Chinese Bank. Dr. Li is also a principal in the PRC’s huge China Telecom, and the China International Trust and Investment Corporation (CITIC), a ministry-level conglomerate with global assets of $21 billion run by Chinese “princeling” Wang Jun. As chairman of Poly Group, Wang Jun also serves as the PRC’s main arms dealer to Communist regimes, terrorists, and rogue states. Nevertheless, Shen Jueren and Wang Jun, like many other notorious Red Chinese agents bearing campaign gifts, were welcome guests at the Clinton-Gore White House.”

The magazine noted that Moorer has repeatedly pointed out that Panama Law No. 5, passed by the Panamanian legislature on January 16, 1997, did far more than grant Hutchison Whampoa port concessions.

According to Moorer, the law grants Hutchison Whampoa — and, therefore, China — exclusive concessions, including, among other things: “Control of the port of Balboa on the Pacific end of the canal and the port of Cristobal on the Atlantic end. In addition to these critical anchorages, Hutchison was granted a monopoly on the Pacific side with its takeover of Rodman Naval Base, a U.S.-built, deep-draft port facility capable of handling, supplying, refueling, and repairing just about any warship.”

Moreover, Moorer observes, it grants Li Ka-shing’s company responsibility for hiring new pilots for the Canal. “Pilots have complete control of all ships passing through the canal,” says Moorer. “They determine which ships may go through and when.”

As Rep. Chenoweth said, the Panama Canal issue is far from over.

Related Articles:

China to Control the Panama Canal

China’s Control of the Panama Canal Revisited