What Happened
China has accepted that the dispute over the ports near the Panama Canal must be handled through international arbitration rather than as a diplomatic confrontation, President José Raúl Mulino said Thursday.
According to Mulino, China conveyed the position through its ambassador, acknowledging that the controversy tied to the port concessions belongs before arbitration tribunals in New York. The president said he welcomed the message and has no interest in escalating tensions with Beijing.
Why the Dispute Matters
The ports at the center of the conflict are among the most strategically sensitive in Panama because of their location near the Canal, one of the world’s most important trade routes. The legal fight follows the collapse of the concession held by a Chinese company after a court ruling overturned it.
Mulino stressed that Panama is not in a direct conflict with China, describing the situation as a dispute between two larger parties in which Panama has been pulled along. He said the case is being handled through the legal channels already in motion.
Rising Pressure in Shipping
The diplomatic tone shift comes as Panama faces a sharp increase in detentions of ships flying the Panamanian flag in Chinese ports. Data from the Tokyo Memorandum of Understanding show 147 detentions in April 2026, up 194% from 50 in April 2025, with 136 of those detentions occurring in China.
Mulino described the jump as abnormal and suggested it could carry political implications. He called the situation complex and delicate, while repeating that Panama is not seeking a confrontation with Beijing.
Panama’s Position on the Port Case
The president also defended his government’s handling of the port administration after the Panama Ports Company contract ended. He said the state’s takeover was not an expropriation, but the result of a judicial order requiring Panama to assume control of the terminals.
By framing the case as a legal process rather than a bilateral political clash, Panama is signaling that it wants the matter resolved in court while preserving broader ties with China. The position also reflects the importance of stability around the Canal, where port operations, shipping flows, and international trade interests converge.
For now, both sides appear to be moving toward a less confrontational path, even as the arbitration process and the shipping tensions continue to unfold.