Panama establishes diplomatic ties with Beijing in blow to Taiwan

Panama has switched formal diplomatic ties to mainland China and broken with Taipei, dealing a major setback to Taiwan and boosting Beijing’s presence in the US’ backyard.

Panamanian President Juan Carlos Varela said in a televised address that Panama was upgrading its commercial ties with China and establishing full diplomatic links with the second most important customer using its key shipping canal.

“I’m convinced that this is the correct path for our country,” Varela said.

Panama’s government said in a statement that it recognised there was only one China – with Taiwan belonging to the Asian giant – and that it was severing ties with Taipei.

“The Panamanian government is today breaking its ‘diplomatic ties’ with Taiwan and pledges to end all relations or official contact with Taiwan,” the statement said on Monday.

A joint communiqué was signed in Beijing between China’s Foreign Minister Wang Yi and his Panama counterpart Isabel Saint Malo.

“This is a historic moment. China-Panama relations have opened a new chapter,” Wang said, describing Panama’s decision as in “complete accordance” with its people’s interests and “in keeping with the times”.