China and Panama signed a joint communique on Tuesday, establishing diplomatic relations. Panamanian President Juan Carlos Varela announced the decision in a televised speech on Monday.

Panamanian President Juan Carlos Varela delivers a TV speech/ Xinhua

"The relationship between China and Panama has a history of more than 160 years," according to the president, who further stressed that migrants from China have been making tremendous contributions to Panama. 

History between China & Panama

The community of ethnic Chinese in Panama began to form in the latter half of the 19th century. The first groups of Chinese laborers arrived in the country in 1854 to work on the construction of the Panama Railroad and the Panama Canal.

There are around 200,000 Chinese migrants in Panama as of 2003, making them the largest Chinese community in Central America, with 99 percent of them of Cantonese-speaking origin.

Economic & trade ties

Bordering the Caribbean Sea and the Pacific Ocean, Panama enjoys a strategic geographical location. The transportation convenience has made the country's Colon free trade zone the biggest of its kind in the Americas.

Transit trade in Panama is the nation's main economic pillar.

China is currently the largest commodity supplier in this free trade zone.

Panamanian government has been pushing hard for its "headquarters economy" in recent years, in a bid to lure more internationally renowned enterprises to base their head offices there by introducing various perks.

Tech giant Huawei and China Harbor Engineering Company are among the Chinese conglomerates that based their regional headquarters in Panama.

A Chinese cargo ship begins to cross the new Agua Clara locks, part of the Panama Canal expansion project, near the port city of Colon in Panama on June 26, 2016.‍/Associated Press)

The famous Panama Canal, an artificial 480-mile waterway that connects the Atlantic Ocean with the Pacific Ocean, is a key conduit for international maritime trade.

Currently, China is the second biggest user of the Canal. After the expansion of the Panama Canal, a COSCO freight ship from China became the first to transit through the canal in June, 2016.

Chinese community in Panama

The Chinese community has to a large extent diversified local demographics and culture.

Panamanian people/Xinhua 

Rice is now one of Panamanian's favorite food. Cantonese food is also popular.

Related Stories:

China welcomes Panama's decision to establish ties

Taiwan affairs office says Taiwan should make 'wise choice'