Let's take a look at how relations developed between the two countries.

Relations between the People's Republic of China and the Republic of Panama began in the 1990s. In September 1995, they signed an agreement to set up offices of commercial development. In the following year, offices were set up in Beijing and Panama City.

More than two decades later, on June 12, 2017, Panamanian President Juan Carlos Varela announced that Panama would establish diplomatic ties with China. He said such a move would greatly benefit the people of Panama.

The next day, the two governments signed a joint communique, establishing diplomatic relations at the ambassadorial level. The communique also states the Panamanian government recognizes there is one China in the world, and Taiwan is an inalienable part of China's territory. The same day, the Panamanian government severed ties with Taiwan, and ordered all Taiwan entities to leave the country within thirty days.

On September 17th, China opened its new embassy in Panama City. Chinese Foreign Minister Wang Yi and President Valera attended the inauguration.

On November 16th, Panama opened its first embassy in China. Foreign Minister Wang Yi called it a key development in the bilateral relationship. According the Foreign Ministry, the two countries have already signed dozens of agreements in various sectors.