Xi Jinping hails Panama leader as a hero for cutting links with Taiwan in favour of mainland China

Chinese President Xi Jinping has lauded his Panamanian counterpart Juan Carlos Varela as being a “hero” for establishing diplomatic ties with the mainland.

Varela began a weeklong visit on Thursday five months after it cut its links with Taiwan.

The two leaders witnessed the signing of 19 agreements on Friday which include the opening of negotiations over a free-trade agreement between the two countries, cooperation over China’s Belt and Road Initiative, transport infrastructure, electricity, finance, tourism and agriculture.

Varela voiced his support for the “one-China” principle on Thursday as he presided over the ceremony to mark the establishment of his country’s first embassy in Beijing.

Xi said during a meeting with Varela on Friday that the building of bilateral ties was a “long-cherished wish” for generations of people of the two countries, adding that they have “turned over a new leaf”.

“With your strategic vision, political courage and shouldering of responsibility, Mr President, you have made an outstanding contribution, and I commend you for that,” said Xi.

The Chinese leader said he hopes that the two countries would make up for lost time after the “decades-long delay” in establishing diplomatic ties.

“I am glad to see that five months after we established ties, the cooperation and exchanges between our two countries has proceeded in full speed which serves as a good beginning,” said Xi.

In June, Panama announced that it was breaking ties with Taiwan to establish full diplomatic relations with China, the second-biggest user of the Panama Canal.

The move was a major diplomatic victory for Beijing as it turns up the pressure on self-ruling Taiwan, which it regards as a breakaway province.

China, with its huge economic clout, has steadily sought to lure away the dwindling number of countries that maintain diplomatic ties with the island.

Beijing is deeply suspicious of Taiwan’s President Tsai Ing-wen and her independence-leaning Democratic Progressive Party, despite her saying she wanted to maintain peace and the status quo with the mainland.

Just 19 UN member states and the Vatican recognise the Republic of China, as the Taiwan government is officially known.

Varela said the establishment of bilateral ties was supported by his people and would bring long-term benefits to both Panama and China.

“When I went to Shanghai 10 years ago, I was greatly impressed by China’s development. And since then China has achieved even greater economic success and has improved the lives of many in getting out of poverty,” he said.

About 10 per cent of Panama’s population are ethnic Chinese whose ancestors arrived in the Latin American country in the 19th century, many of whom went on to work on the Panama Canal and its railways, Varela added.

In July, a consortium formed by China’s China Harbour Engineering Company and Belgium’s Jan de Nul group was awarded a US$165 million contract to design and build a new cruise terminal at the Panama Canal’s Pacific entrance. The terminal is expected to be fully functional by the end of 2019.

In an earlier interview with the South China Morning Post, Panama’s envoy to China Francisco Carlo Escobar said the two countries were planning to discuss a number of possible trade agreements.

Panama would seek to attract Chinese investors to its Colon Free Trade Zone, located near the Atlantic entrance to the Panama Canal, he said, while another deal would seek to allow airlines to operate flights between the two countries.