China’s Panama-flag detention campaign starts to ease

Panama Maritime Authority China’s detention of Panama-flagged ships has fallen sharply following negotiations between Beijing and Panama City, bringing relief to owners caught in an extraordinary maritime dispute linking ship inspections to control of two Panama Canal terminals. Panama said Chinese ports detained 16 vessels flying its flag during July, down from 140 in May. Only 10% of inspections resulted in detention this month, compared with 37% at the height of the campaign. The improvement follows a much more damaging first half. Nearly 500 Panama-flagged ships have been detained in China since January, according to Asia-Pacific inspection data. There were 431 detentions between March and June, more than four times the comparable level a year earlier. The crackdown followed Panama’s removal of Hong Kong’s CK Hutchison subsidiary Panama Ports Company from Balboa and Cristóbal, the terminals at either end of the canal. Panama’s Supreme Court ruled the concessions unconstitutional, after which APM Terminals and MSC’s Terminal Investment Limited were appointed as interim operators. CK Hutchison has launched arbitration proceedings seeking more than $2bn. China maintains that the detentions were based on safety deficiencies. Washington has taken a different view, with the Federal Maritime Commission describing the inspections as the “weaponisation” of port state control and warning that they could disrupt US trade and establish a dangerous precedent. The commercial consequences have extended beyond delayed port calls. Hundreds of ships appear to have left the Panama registry during the dispute, while owners trading frequently to China have had to weigh the costs of reflagging against the risk of repeated inspections. Officials from both countries have now reached a consensus on renewing their maritime transport agreement, which provides Panamanian ships with port advantages and streamlined procedures in China. Follow Us Sam Chambers Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune. Newsletter DAILY SPLASH NEWSLETTER Subscribe now for FREE daily news updates. Subscribe Read Next August 3, 2026 New Yangtze books Changhong newcastlemax pair July 31, 2026 Singapore hands out eight LNG bunker licences July 31, 2026 Splash Wrap: War-risk map widens July 31, 2026 Iran remains chief suspect as Damietta damage picture emerges July 31, 2026 Black Sea ship attacks spread Back to top button