Global Commerce: The Ultimate Soft Power
FIRST INSTANCE: The Panama Canal and U.S. Hegemony (1903) Curiously, the concept of a powerful nation dictating terms around the Panama Canal didn't begin with China. The United States, in 1903, orchestrated Panama's secession from Colombia precisely to secure the rights to build and control the interoceanic waterway. The Hay–Bunau-Varilla Treaty, signed by a Panamanian representative who wasn't
even Panamanian, granted the U.S. perpetual sovereignty over the Canal Zone. Panama received a paltry $10 million and an annuity. This established the precedent: whoever controls the canal controls a vital artery of global trade, and powerful nations are not above 'persuading' smaller ones to comply. The U.S. maintained this control until the Torrijos–Carter Treaties of 1977, reluctantly ceding
full ownership to Panama by 1999. REPETITIONS: 'Strategic' Investments and Diplomatic Pressure The 1990s saw a renewed push by China, often through Hong Kong-based firms, to establish a presence in strategic global infrastructure. Case in point: the 1997 lease of the former U.S. naval base at the Panama Canal's former Rodman Naval Station to Hutchison Port Holdings, the same firm now embroiled in
this dispute. At the time, U.S. officials, including then-Secretary of Defense William Cohen, voiced concerns about potential Chinese military access, underscoring the perceived strategic value of these port operations (Department of Defense, 1999). Fast forward to 2011, when Sri Lanka faced mounting debt from its Hambantota Port project, largely financed and built by Chinese companies. When Sri