Since establishing diplomatic relations earlier in the year, China has been in the news in Panama on an almost daily basis.
Take for example this weeks announcement that the two nations are considering giving Panama-flagged ships “favored nation status” in China harbors, no doubt on a quid-pro-quo basis. And last month, also on the trade front, Panama announcing new trade agreements to the sum of $38 million dollars based on the 18 Chinese companies who visited Panama and met with local exporters.
And the biggest news of all is that Panama is courting China to design, fund, and build a rail system connecting the western city of David in the province of Chiriqui to the nation’s capital in Panama City. This, of course, is akin to newlyweds dreaming about their first home and starting a family together. Right now, it’s just that…a dream.
But Panama is definitely in the honeymoon stage with China, and anyone who lives in Panama City can attest to the fact that there are more Chinese nationals (who are easily identifiable from their local, mostly Cantonese-speaking counterparts who have been here for generations) in the city’s hotels, shopping malls, and business centers conducting due diligence.
So what’s to be expected of this new courtship?
Well for starters, exporters of products like coffee, wood, scrap metal, and seafood are seeing immediate results in the form of the aforementioned purchase-orders of $38 million.
Free Trade Zone owners, hard hit by a drop in global trade and a soured relationship with neighbors Colombia and Venezuela are licking their lips at the possibility of re-establishing Panama as a gateway for China into Central America and even South America. They’ve seen a double digit increase over the last 6 months, although it’s hard to say how much of that is related to the new China ties.
On the real estate front, my company has seen an uptick in interest from Chinese neighbors, including Singapore, Vietnam, and quasi-Chinese Hong Kong. They, like the Chinese, usually move slowly, but when they do move, they move in a big way and the kind of conversations we are having with visiting family offices, investment advisors, and wealthy buyers lead me to believe that there are a lot of people who now have Panama on their radar.
And Panama property prices, although they may not feel that way for anyone who has been here for more than 10 years, are still “cheap” for someone coming from Shanghai, Hong Kong, and Singapore, where prices start at around 3 times what they are in Panama.
At the end of the day, it’s a trend to follow and rest assured, we’ll be following it very closely because if Panama takes off like Vancouver, Toronto, or San Francisco has, then we’re in for a wild ride.