Secretary of State Mike Pompeo said Thursday that he had warned President Juan Carlos Varela of Panama about doing business with China, criticizing Chinese state-owned enterprises that engage in “predatory economic activity.”
As his plane left Panama City, Pompeo recounted his talks with Varela and local journalists. Clearly concerned that Panama could become a beachhead for growing Chinese economic influence in the Western Hemisphere, he emphasized that Panamanians should be cautious when considering business ties with China.
Pompeo said he intended to tell the entire region that “when China comes calling, it’s not always to the good of your citizens,” and that countries had to watch out for Chinese companies that “show up with deals that seem too good to be true.”
His warning came more than a year after Panama cut diplomatic relations with Taiwan — which China views as a part of its territory — in favor of establishing ties with Beijing.
Pompeo visited Panama City for an afternoon, stopping at the presidential palace to meet with Varela before going to the U.S. Embassy to address employees there. Pompeo told reporters on his plane that he had discussed a range of issues with Panamanian leaders, from economic ties to counternarcotics, and that China was one of the priorities.
“The importance isn’t that China is out competing in the world,” he said. “We welcome that. It’s when state-owned enterprises show up in a way that is clearly not transparent, clearly not market-driven and designed not to benefit the people of Panama, but rather to benefit the Chinese government.”
“Those are the kind of things we think are both inappropriate and not good for the people of Panama or any other country where China is engaged in this kind of predatory economic activity.”
Pompeo declined to cite specific projects that he considered questionable.
Pompeo’s warning was one of the clearest expressions yet by a senior U.S. official of growing anxiety in Washington over China’s global economic activities, especially involving loans and infrastructure projects.
China is the second-biggest user of the Panama Canal, after the United States.
Chinese companies are working on a range of infrastructure projects in Panama, including ports.