The Chinese Threat!!!

In the past few months, Panama has been subject to a barrage of "Bad Press" generated by US politicians that not only is unfair, but is seriously impacting tourism, investment, and retirement in this beautiful country. To help understand these myths I have the honor of presenting Mr. Robert Baker who is a well known American businessman living and involved in the commercial business circles of Panama for many years. He is well qualified to address this question. Here is his comment on this ridiculous situation his own words:

June 25, 2000

As past president of the American Chamber of Commerce and US Navy League in Panama, I am surprised at the number of intelligent people who have been fooled by "private agenda" politicians into believing that there is a Chinese problem with the Panama Canal. Some have gone so far as to suggest that the "red Chinese have taken over the Canal". This is so far from the truth that one wonders how such a story can get repeated by intelligent people. Here are the facts.

Three years ago in early 1997 I was invited by US Ambassador William Hughes to a breakfast with six visiting US Congressmen at the ambassador's home in La Cresta. These Congressmen, I am embarrassed to say, were down here on a "fact finding mission" to investigate the Chinese rumors. I think it important to note that it was the month of February which is very cold in Washington and very sunny and warm in Panama with tropical breezes flowing through the palm trees, not to mention the fact that the trip was paid for by all of us US taxpayers. If you were offered a free trip to a beautiful and sunny tropical paradise during the coldest month of the year in the States, what would you do? Their visit helped spread the Chinese rumor.

Here are the facts as I presented them to our "concerned" U.S. Congressmen. Several large companies submitted closed bids to manage the two ports on the Pacific and Atlantic sides of the Panama Canal. The large US construction company, Betchel bid only $2 million per year while the large British port manager, Hutchinson Wampoa bid almost $22 million per year. If you were the Panama government, which bid would you accept? Hong Kong was a British colony at the time and Hutchinson Wampoa is a British company who manages ports all over the world. They are a public company traded on all major stock exchanges. Anyone, including China, can own shares of their stock. It is a far stretch to conclude that since Hong Kong has reverted to China, that now makes Hutchinson Wampoa a Chinese company and that implies China has taken over the Panama Canal. It is also easy to understand that Betchel, the only American bidder, probably helped seed the Chinese rumor over sour grapes because they lost the bid. They also used US political pressure to try to get the Panama government to nullify the winning bid and open the process for re-bidding. It failed.

The "Chinese control the canal" idea is absurd. There are no Chinese running the ports. They are British and Panamanian employees. Keep in mind that the US military can return to Panama "without notice" at any time to insure the security and independence of the Canal.

We defeated Japan in W.W.II. Would you say that Japan now owns or controls the US government? After all, they own more US treasury bills than any country on earth.

Other facts you might want to consider if you are concerned about visiting or investing in Panama are the multinational corporations who find Panama to be a very good investment. Kansas City Southern Railroad won the bid on the old Trans Panama railroad line. Their investment is over $200 million. Bell South won the bid to establish the cellular telephone system and invested $100 million, while Cable & Wireless won the bid for the land lines and invited $652 million the first year and $500 million the last two years, and the list goes on and on. Panama has received over $2 billion in foreign investment during the past several years and privatization has brought in the latest technology. U.S. companies that have located here include Microsoft, Mobile Oil, AT&T, NCR, Delta, FedEx, American Airlines, Swift, General Mills, Xerox, Continental Airlines, DHL, Lanier, Kodak, G.E., Kraft Foods, Nabisco, Nestle, Coca-Cola, Pepsi, Merrill Lynch, Bank of America, Chase Manhattan, Citibank, Intel, 3M, IBM, Bristol, Meyers, Pfizer, Johnson & Johnson, Exxon, Colgate, Amway, Schering-Plough, Proctor & Gamble, Marriott, Holiday Inn, McDonalds's, Friday's, Bennigan's, etc, and these companies are only several of the more than 200 that have made substantial investments for long term returns.

I would be happy to discuss any aspects of the above report with anyone concerned with Panama. My cell phone, e-mail, and fax are listed below.

Best regards,
Robert E. Baker
Financial Consultant
Fax: (507) 265-6204
E-mail: robert.baker@cwp.net