The Chinese maritime triad

Alternative to the Panama Canal

In 1977, the U.S. and Panama signed the historic “Panama Canal Treaty”, under which, as of December 31, 1999, Panama assumed all obligations to control the operation and defense of the canal, and established its neutrality. The exceptional importance of this sea route is explained by the possibility of providing navigation between the Pacific and Atlantic Oceans, and the modernized infrastructure of the Canal allows the passage of oil tankers and container ships of Panamax standard.

At the end of 2024, even before taking office, Donald Trump announced US claims to the Panama Canal. In his opinion, the authorities of Panama set unreasonably high tariffs for the passage of American ships, which provide a significant part of the trade turnover along the route, and also allow the PRC to interfere in the management over the strategic water route. At the same time, about three-fourths of the cargo moving through the canal is American, with Chinese merchant ships taking the second place. President Jose Raul Mulino denied all allegations about the loss of “neutrality” over the Panama Canal, but almost immediately afterward, the country's authorities initiated an audit of the port operator, Panama Ports Company, which has a 25-year concession contract.

The U.S. claim to the Panama Canal is quite logical, as it opens a window of opportunity for the implementation of plans for the global strengthening of America, including in the military sphere. Nevertheless, arguments about the growing influence of the PRC in the Latin American region are also not unreasonable. In 2017, Panama confirmed its commitment to a unified China and cut off all relations with Taiwan, an important diplomatic victory for Beijing. In parallel, Panama became the first Latin American country to sign up to China's One Belt, One Road initiative. In the same year, China's Landbridge Group acquired control of Margarita Island, Panama's largest port on the Atlantic coast, in a deal worth $900 million. In 2018, China Harbour Engineering Company and China Communications Construction Company participated in the construction of the fourth bridge across the canal, a contract valued at $1.4 billion. Cooperation in agriculture and health is increasing between the countries. Of course, such an increase in infrastructure projects could not but cause concern on the part of the United States of America, which in the future may use both economic enforcement and military methods to establish control over the Panama Canal.

However, it is not only Beijing's growing activity in Panama that should be of concern to the United States, but also the revival of the idea of the Nicaraguan Canal, the plan for which Chinese companies are actively working on after a long break. In 2012, Nicaragua's National Assembly approved a project to build the “Great Transoceanic Canal of Nicaragua,” which would connect the waters of the Pacific and Atlantic Oceans. The new sea route was expected to be a longer, wider and deeper alternative to the Panama Canal and would significantly relieve maritime traffic. The construction of the canal was scheduled for completion in 2029. The project was to be implemented by the Hong Kong company HK Nicaragua Canal Development Investment Co Ltd, as China was more interested than other countries in the construction of the canal for transportation of large volumes of Venezuelan oil. However, the project did not actually receive the promised investments and was frozen. This was largely due to the risks of an environmental disaster arising from the use of the waters of Lake Nicaragua and an active political campaign against the construction organized by Washington.

In April 2023, Nicaragua, China and Russia reactivated the Nicaragua Canal project at the level of start-up agreements. Later, Nicaraguan President Daniel Ortega presented an updated map of the canal at the summit of China and Latin America and the Caribbean, which resulted in the signing of a number of important agreements: with the Chinese company SAMS on the construction of a deepwater port on the Caribbean coast of Nicaragua in the city of Bluefields and with the company CCSA on the design and implementation of an intelligent logistics center. The Russian side has also been invited to implement the project.

The growing tension between the PRC and the US, as well as the administrative restriction of navigation in the Panama Canal due to drought and shoaling, which was observed in 2023, amid growing demand for a unique water route, turns the Panama Canal into a political and military tool of influence in the hands of Washington, as openly stated by Donald Trump. In this light, Beijing is interested in obtaining a maritime route independent of the US, which could be the Nicaraguan Canal. The balance of power in the Latin American region, as well as the stability of future maritime communications, will directly depend on whether Chinese companies will be able to successfully finance and implement the project this time.

The “sub-Arctic” state of China

In 2018, the PRC published a White Paper on the Arctic, which proclaimed China's status as a “sub-Arctic” power. At the official level, Beijing enjoys observer status in the Arctic Council on an equal footing with other non-Arctic countries. According to the government's position, Beijing's policy goals for the region are to promote Arctic governance and to engage in scientific research and environmental protection in order to uphold the common interests of all countries and the international community and promote the sustainable development of the region.

However, we should not forget that China is the world's largest trading power, and global warming in recent years has accelerated the melting of ice and snow in the Arctic, making the region more important for global shipping, international trade, energy supply, and natural resource extraction. Experts estimate that by 2045 the ice of the Northern Sea Route will be so thin that most ships will be able to pass through it without the help of Russian icebreakers, and thus reduce their transit costs. From a strategic perspective, the Arctic is an opportunity for the PRC to avoid a situation where trade routes connecting it to Western and Middle Eastern markets pass through territories under significant control or administration of U.S. forces and could be blocked by them in the event of a crisis. The Polar Silk Road Initiative, created within the framework of the One Belt, One Road program, makes it possible to speed up maritime transportation, as well as increase its safety and “independence” from Western countries. The Arctic Ocean is the third Silk Road corridor - after the land corridor through Central Asia and the Indo-Pacific Sea Route to the European Mediterranean. For example, nearly 80 % of China's oil imports go through the Strait of Malacca, which is under constant threat of being blocked by the United States. Thus, the sea route through the Arctic Ocean makes it possible to diversify such risks and increase the national security of goods supplies.

For China, the increased access to Arctic exploration that we have seen in recent years is the result of a consistent, multi-year strategy to build “Arctic power. Back in 2004, Beijing built the first Arctic research station in Norway and later a satellite facility in Sweden. In 2018, Iceland and China opened a joint research station in Karhol. Meanwhile, Denmark rejected a similar proposal from Beijing. China's multimillion-dollar investments in science and infrastructure in the Arctic have already borne good results - they create a sense of China's global presence in the region, which is what the Chinese administration has been striving for.

Today, China's main partner in the Arctic is Russia. Last year, "Arctic Express № 1" was launched - a new route linking Arkhangelsk along the Northern Sea Route with the main ports of the People's Republic of China, which is designed to accelerate and optimize cargo transportation between the countries. In parallel, in June 2024 at the St. Petersburg International Economic Forum it was announced the intention of Rosatom State Corporation and HYNS to launch year-round container transportation along the Northern Sea Route between the ports of the two countries in 2027 with the simultaneous establishment of an enterprise that will design and build ice-class container ships necessary to ensure continuous navigation, as well as manage the Arctic container line. On average, the route through the NSR is 30-50% shorter than traditional routes. In addition, the agreements reached in March 2023 by the heads of state on harmonizing efforts in the organization of navigation, combating terrorism, illegal migration, smuggling and illegal fishing were implemented. On October 10, 2024, the first joint patrols of Russian and Chinese coast guard ships in the North Pacific Ocean took place. And in the summer of the same year, Western media were cautious about the deployment of three Chinese research icebreakers - Xuelong 2, Ji Di and Zhong Shan Da Xue Ji Di - in the Arctic.

The fact that Chinese-Russian cooperation in the Arctic is steadily growing is a concern for Western countries, as it firmly ties the “aspiring” Arctic state to the largest Arctic power, Russia. In response, the U.S., Canada and Finland in July 2024 concluded the “ICE Pact,” an agreement that opens the door for Washington to have a greater presence in the Arctic by building and acquiring icebreakers. However, even this was not enough for the new administration, having abandoned attempts to acquire land in Finland, Swedish seaports and Greenland, Donald Trump threatened to forcefully obtain Greenland territories. Such aggressive rhetoric is largely due to the realization of Denmark's inability to ensure the military security of Greenland and adjacent waters. First of all, this concerns the means of monitoring military activity, intelligence and analysis of the situation in the region against the backdrop of the growing cooperation between Russia and China.

Thus, China seeks to consolidate its status as a global power in all disputed regions of the world. The South China Sea has traditionally been an arena of disputes between China, the Philippines, Malaysia, Vietnam, Indonesia, and Brunei. Whether the silent confrontation between the countries will develop into an active phase will depend on whether their partners, primarily the United States, will agree to enter into an open conflict, not only financially, but also with their own military resources.

Today, the presence of China in the Panama Canal, which has been actively discussed over the past month, is attracting more attention from the world community. However, in terms of its importance, it may be inferior to a more important strategic plan - the de-conservation and implementation of the plan to build the Nicaraguan Canal. If the project is successfully launched, China will have a trade route independent of Western influence, which could have a significant impact on the balance of power in the Latin America region. At present, it is Chinese companies, which are responsible for financing and implementing the project, that determine the future of the new sea route. As for such politically sensitive geographical areas as the Arctic zone, Beijing is developing mainly through cooperation with Russia. However, even in conjunction with Russia, Chinese activities in the Arctic justifiably pose political and economic threats to the West.