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Carter gets a lot of unwarranted grief for this, in my opinion. The reality is that even as early as the mid-1970s it was becoming clear that the Panama Canal was becoming obsolete. It serves very little purpose from a military standpoint because our large warships are too large to fit through the lock system (one factor in the U.S. naval policy of maintaining separate Atlantic and Pacific fleets).

From a commercial standpoint, the Panama Canal has lost a lot of appeal because the canal cannot accommodate the current generation of container ships and oil tankers, either.

China's interest in the Canal is likely tied to manufacturing interests in northern China, which are facing increasing competition from other parts of Asia (notably India, Malaysia, and Indonesia) that lie further to the south and west. The geographic location of these nations makes them more attractive centers of manufacturing than China because they are closer to the largest consumer markets in the world -- Western Europe and the Northeastern U.S. -- via a better water route (the Suez Canal, which can handle larger ships and more of them because it is a flat canal with no lock system).