(eng)China vs Taiwan in Panama

The Anarchives (tao@lglobal.com)
Thu, 5 Dec 1996 01:15:15 +0000 (GMT)

---------- Forwarded message ----------
Date: Tue, 3 Dec 96 15:15:47 CST
From: pma_news <pma_news@pananet.com>
Subject: China vs Taiwan in Panama

Panama caught between two Chinas
by Jos=E9 Montano and Eric Jackson
Next year's British withdrawal from Hong Kong puts Panama in a delicate
situation. Mainland China, which will take over the colony that came into
British hands as the result of the 1840 Opium War, is the Panama Canal's
third biggest customer. As the owner of a major stake in Hutchison Whampoa,
the Communist Chinese government will own interests in the ports of
Cristobal and Balboa starting early next year. Yet despite these important
commercial ties, Panama may be forced to close its Hong Kong consulate.
Mainland China considers Taiwan to be a rebel province and refuses
to maintain diplomatic relations with any country that exchanges
ambassadors with Taipei. Taiwan, for its part, considers itself the only
legitimate government of all China despite the fact that its authority
extends over less than two percent of all those who consider themselves
Chinese. In light of these irreconcilable claims, the Beijing authorities
have warned Panama and several other countries that full diplomatic
relations with the mainland-including a break with Taiwan-are a
prerequisite for keeping a consulate in Hong Kong after its reversion.
Taiwan, however, is one of Panama's oldest and closest friends, and
the Nationalist Chinese also have important investments here. The Taiwanese
Evergreen shipping group is building a modern new port facility at Coco
Solo, Panama is the hub for Taiwan's EVA airline's Latin American air
service, and the island nation has committed itself to building an
industrial park at Fort Davis. Taiwan's trade representative here, Ming-Shu
Chen, warns that any downgrading of Panama's full diplomatic relations with
Taiwan will dry up his country's investments here.
The mainland Chinese trade representative here, Ju Yi Je, says that
his country does more than $600 million worth of business with Panama every
year and would like to increase that figure as it builds its commercial
ties with Latin America. Beijing's Vice-minister of Commerce Yang Wen Sheng
adds that his government would like to invest in seafood processing plants,
electric power generation and a sugar refinery here.
The political and commercial rivalry between the two Chinas is
especially acute in the shipping industry, according to local industry
observers. Both Taiwan's Evergreen-the world's largest shipping company-and
the mainland's China Overseas Shipping Company (COSCO) are partly
government-owned and pursue their countries' political objectives.
One local shipping executive who has worked with both the Taiwanese
and the mainlanders told The Panama News that COSCO tends to shadow
Evergreen around the world, so that it was no big surprise that a firm with
mainland ties got into Panama's port business on the heels of Evergreen's
investment here. "A business in Communist China is in no way something
autonomous," our source noted. "Communist Chinese businesses that have come
to Panama are here to do the bidding of the government in Beijing."
"They come here with another system of operation, another system of
thinking," our source said. "They offer good salaries and benefits, but
once they start working, they back away from their relations with
foreigners, lower salaries accordingly, and replace local people with
Asians. The Chinese managers communicate directly with Beijing and
eventually the Chinese employees here only talk with other Chinese."
That business culture may not survive here, though. Hong Kong is
the world's fourth-largest export economy, and Panama is the colony's
biggest Latin American customer. Hong Kong companies' dealings through the
Colon Free Zone amount to $1.2 billion annually. Just as the Colombian drug
cartels are being run out of some of the positions they have taken in
Panama's economy and the American presence here is diminishing, a lot of
nervous Hong Kong capitalists are looking for places to shelter their money
from the risks they consider inherent in the colony's reversion. Even in
Taiwan there's a growing unease that the island will ultimately be reunited
with the mainland, and this perception feeds Taiwan companies' urge to
place their assets beyond Beijing's reach. It adds up to a significantly
greater Chinese role here, but not a monolithic one. The Chinese investment
boom has and will have some strong anti-Beijing streaks, and if business
cultures from either China are seen to be obnoxious, their cross-straits
rivals are likely to have few qualms about using that negative image for
competitive advantage.
In the past year Panama has sent high-level delegations to both
Taipei and Beijing. In each case Panamanian representatives have come back
with impressive business deals to show for their efforts. However, there
have been few political breakthroughs. The P=E9rez Balladares
administration's stated position is that the traditional friendship with
Taiwan will be maintained, and that so long as Beijing demands that those
ties be broken its commercial relationship with Panama may grow, but
diplomatic ties will not be established with the mainland. Despite such
assurances, Taiwanese diplomats and business executives here are
understandably nervous.