DATE=12/16/1999 TYPE=BACKGROUND REPORT TITLE=PANAMA - CHINA NUMBER=5-45021 BYLINE=STEPHANIE MANN DATELINE=WASHINGTON INTERNET=YES CONTENT= VOICED AT: INTRO: As the United States turns the Panama Canal over to the government of Panama, some Americans are wondering if actual control of the canal will be in the hands of China. Correspondent Stephanie Mann reports others dismiss such concerns as unwarranted. TEXT: Panama awarded a Hong Kong company a 25-year lease to run operations at the Atlantic and Pacific ports at the two entrances of the Panama Canal. That decision has prompted an outpouring of concern, especially from politically conservative groups in the United States who say the contract poses a security risk. They say the arrangement allows the Hong Kong company, Hutchison Whampoa - and by extension mainland China - the potential ability to control the canal. One of the most outspoken critics is Republican Congressman Dana Rohrabacher (from California.) In a V-O-A T-V interview, Congressman Rohrabacher criticizes the bidding process that awarded the contract to Hutchison Whampoa, and he says the company is too closely allied with Communist authorities in Beijing. /// ROHRABACHER ACT /// The issue is whether or not the United States government should stay mute while a company that is basically a front company for the Chinese government and run by someone who is in the inner circle of the Communist Chinese Party leadership takes control and possession of the ports on either side of the Panama Canal, thus putting themselves in a position to dominate the Panama Canal once the United States has totally left the scene. /// END ACT /// President Clinton has dismissed such concerns, saying he is comfortable that U-S commercial and security interests are protected under the agreement that gives the canal back to Panama. Latin America analyst Michael Shifter has been closely watching the Panama Canal hand-over. Mr. Shifter, program director at the Inter-American Dialogue, disputes accusations that Hutchison Whampoa is closely tied to the Chinese Communist Party. /// SHIFTER ACT /// There are inevitably going to be some connections and some links with the Chinese government. But to say that this is a stooge of the Chinese government, I think, is a gross overstatement. There's no basis in fact to support that claim. This is a company that is out to make money (and) that is motivated by profit. /// END ACT /// Hutchison Whampoa is only one of several companies that have been given port concessions in connection with the Panama Canal. Two U-S companies, a Taiwanese company, and a Saudi Arabian firm are also involved in running port activities. Hutchison Whampoa will be handling the loading and unloading of cargo from ships at the two entrance ports as well as ship repairs and refueling. Retired U-S Ambassador Charles Gillespie has been studying the Panama Canal reversion for the Atlantic Council and recently visited Panama to look into the China connection. Ambassador Gillespie says Hutchison Whampoa is a respected company that has been operating ports around the world. /// GILLESPIE ACT /// It's a company that has been operating out of Hong Kong for I guess about or over 150 years. It is not a new company. And it's a multi- billion dollar enterprise. It is a publicly traded company; it's listed on the Hong Kong and London stock exchanges. According to the public records, the company does not have any significant visible investment from mainland China or any other governments. Its corporate headquarters is in Featherstone, England, and not in Hong Kong. /// END ACT /// The company's major owner, billionaire Li Ka-Shing, is reported to have ties to the government in Beijing. But Mr. Gillespie notes he is one of the wealthiest men in the world and is well regarded in London and other world capitals. He also points out that the Hutchison Whampoa managers in Panama are all non-Chinese and most are British nationals. And Ambassador Gillespie says concerns about possible Chinese control over the canal are misplaced. /// GILLESPIE ACT /// The port operations in Panama are distinct and totally separate from the canal operations. The operators of the canal are employed by and responsible to something called . the Panama Canal Authority. That is a Panamanian operation. It employs the executives who run it, and it employs the pilots who get on the ships and take them through the locks and through the canal itself. It employs the people who operate all of the equipment, who run the watershed areas and manage all the details of canal operations. And that is purely Panamanian. /// END ACT /// Mr. Gillespie served as U-S ambassador to Colombia and spent most of his foreign service career in Latin America. He dismisses concerns about the canal's security by pointing to an agreement called "the Neutrality Treaty" that was part of a treaty package governing the canal negotiated in the 1970's. Ambassador Gillespie says the Neutrality Treaty requires the governments of Panama and the United States to ensure the neutral operation of the canal forever. He says the U-S government is obliged to intervene if it perceives that neutrality is being compromised. /// REST OPTIONAL /// He also notes that Panama has friendly diplomatic relations with Taiwan, not the People's Republic of China. So, he says Taiwan will likely watch the canal operations very closely. Moreover, Ambassador Gillespie says the countries on the west coast of South America as well as most countries in Asia and western Europe depend on traffic through the Panama Canal for their commerce. He says they, too, will want to make sure that traffic is handled efficiently and without any political interference. (Signed) NEB/SMN/JP 16-Dec-1999 12:18 PM EDT (16-Dec-1999 1718 UTC) NNNN Source: Voice of America .
