China has significantly ramped up port state control (PSC) inspections of Panamanian-flagged vessels, detaining 44 ships between March 1 and 18 — roughly three times the number detained during the same period last year, according to data from the Tokyo Memorandum of Understanding (Tokyo MOU), a 22-member regional port authority body that includes both China and Panama.
The surge appears to be Beijing’s response to Panama’s decision to strip Hong Kong-based CK Hutchison Holdings of its operating rights at two ports along the Panama Canal. Between March 8 and 12 alone, Chinese ports detained 28 Panamanian vessels, accounting for 75.7 percent of all detentions — far above historical norms, according to shipping publication Lloyd’s List.
What makes the crackdown particularly striking is its selective nature. Tokyo MOU data shows that many of the detained Panamanian ships were classified as “general risk” or “low risk,” while higher-risk vessels of other nationalities were largely left alone. In the same period last year, only high-risk Panamanian ships were detained. Chinese maritime analysts have noted that vessels which would not normally be subject to inspection are now being boarded, though Beijing’s use of legal mechanisms gives Panama little formal grounds for complaint.
The economic consequences could be severe. A WeChat maritime account estimated that each detained vessel faces an average daily demurrage cost increase of approximately $18,000. More broadly, analysts warn that shipowners may increasingly consider re-flagging their vessels away from Panama to avoid prolonged political and operational risks.
Panama, the world’s second-largest flag-of-convenience state with over 8,000 registered vessels, earns an estimated 3% to 5% of its national revenue from ship registration and annual fees — its second-largest stable income source after Panama Canal tolls. A large-scale exodus of Panamanian-flagged ships would deal a serious blow to the country’s public finances.
Source: Central News Agency (Taiwan), March 20, 2026
https://www.cna.com.tw/news/acn/202603200300.aspx