China seeking extradition of national from Panama in battle over canal ports
by Bill Gertz · The Washington TimesA Chinese national in Panama is being sought by Beijing as part of the high-stakes geopolitical battle between the United States and China over control of the ports near both entryways to the strategic Panama Canal.
Prominent Chinese businessman Kenneth Liang Zhang is fighting an extradition request from China over allegations he misappropriated funds from a Chinese Communist Party-linked company that lost out in a canceled bid to build a major new port on Margarita Island, near the Atlantic entrance to the canal.
The case is unfolding as part of the high-stakes battle over Chinese control of the canal’s two ports and U.S. efforts to prevent Beijing from expanding its access to new, multibillion-dollar projects near the canal.
Mr. Zhang’s situation, meanwhile, reads like a lost verse from the Warren Zevon song about a troubled gambler in Havana calling for lawyers, guns and money.
China seeking retaliation
The extradition request is working its way through the Panamanian government’s legal system, and Mr. Zhang has been held in jail since his arrest in July.
“It’s geopolitical retaliation aimed at the United States and the pro-U.S. Panamanian government while pursuing the unlawful and unjust extradition of an individual caught in the middle of China’s effort to reclaim influence and strategic interests it has lost in Panama,” said Mijail Castillo, Mr. Zhang’s lawyer in Panama.
A further complication involves a lawsuit Mr. Zhang filed against an American energy company. Mr. Zhang’s Sinolam, a Panamanian energy developer, in January sued Arlington-based utility AES Corp. for $4 billion alleging the company improperly blocked Sinolam from a Panamanian LNG project.
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Court documents from that case state that Mr. Zhang was abducted and physically threatened, and they accuse several Panamanian presidents and powerful local businessmen of engaging in uncompetitive practices against his company.
Mat Youkee, a Panama-based journalist who has covered Mr. Zhang’s cases, said in his Substack that Mr. Zhang at one point managed the failed roll-on, roll-off port project at Margarita Island, a project that had raised U.S. security concerns over a potential third Chinese dual-use military-civilian threat near the canal.
After the Margarita deal soured, Mr. Zhang sold the interests to Notarc against the wishes of Landbridge.
“In a few short years, Zhang managed the remarkable feat of simultaneously aggravating the U.S., China and Panama,” Mr. Youkee told The Washington Times. “He was a ’man without a country,’ as one source put it to me, flying between the U.S. and Panama on a Saint Lucia passport while his legal case against AES passed through courts in Virginia.”
Mr. Castillo said the AES case was suspended. An AES spokeswoman said the plaintiffs withdrew the suit and the case was closed recently.
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Regarding the extradition, Mr. Castillo told The Washington Times the effort is not about legitimate law enforcement in China.
His lawyers are seeking to block the extradition by filing a petition with the Inter-American Commission on Human Rights. They’ve also filed an asylum and refugee-protection request with Panama’s refugee office, known as ONPAR.
A former associate of Mr. Zhang revealed to investigators in Panama that she was detained, pressured and tortured into making false accusations against him, which are central to China’s extradition.
China alleges Mr. Zhang obtained millions of dollars from a Beijing-linked company called Hong Kong Landbridge Port Services Ltd. after the local government cancelled the Margarita port for failing to meet contract obligations.
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That company is part of China’s Landbridge Group, owned by Chinese billionaire Ye Cheng, who has ties to the Chinese Communist Party and has been defended by the Chinese government in the past.
Landbridge also owns a port in Darwin, Australia, that the United States is pressing the Australian government to cancel over potential security threats.
Beijing alleged in an Interpol red notice arrest request that Mr. Zhang, his company Sinolam and others improperly stripped Landbridge’s 51% interest in the failed Margarita port project by altering documents.
Landbridge won the concession in 2017 and publicly described it as part of China’s Belt and Road global infrastructure initiative.
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By 2020, however, delays and unmet promises of Chinese funding caused the government to declare contract breaches and project shares were then transferred by Mr. Zhang to his company Sinolam.
A year later, the shares were sold to the U.S.-owned Nortac Management Group, which has agreed to complete and operate the port.
Landbridge then claimed the agreement transferring shares was forged, asserting the company had not relinquished its 51% stake in the project and wanted back into the deal.
That led to criminal charges against Mr. Zhang in Panama. After a multi-year investigation, the Panama Public Prosecutor concluded on Dec. 30 that the evidence did not show any criminal conduct.
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China then worked through Interpol, where it has been shown to wield substantial influence in the past, to pursue Mr. Zhang’s arrest and extradition.
The Panamanian government has until early November to rule on the request. No formal extradition treaty exists between Panama and China and current law prohibits sending suspects to nations that could impose the death penalty or a life sentence.
Mr. Castillo said China’s extradition request does not include those guarantees.
The case is unfolding amid a major effort by the Trump administration to regain control over the Panama canal and eliminate Chinese influence.
The United States built the canal from 1904 to 1914 across the narrow Isthmus of Panama. In 1977, then-President Jimmy Carter signed a deal to return control of the canal to Panama.
Control was shared jointly between Panama and the U.S. from 1979 to 1999, when full control was given to the Panamanian government’s Panama Canal Authority.
President Trump publicly threatened to “take back” the canal in December 2024 over concerns of Chinese influence and canal fees charged to U.S. ships.
In February 2025, Secretary of State Marco Rubio met in Panama with Panama President Jose Raul Mulino and was told Mr. Trump had made a preliminary determination that Chinese Communist Party influence over the canal violated the 1977 handover treaty. Mr. Rubio told Mr. Mulino that the U.S. would take action unless changes were made.
At the State Department, a spokesman was asked if the department is concerned that China’s effort to extradite Mr. Zhang might allow Beijing to gain information useful in its efforts to regain commercial access to ports in Panama.
“Panama is a pillar of our maritime trading system, and as such must remain free from any undue external pressure,” the spokesman said. “Any attempts to undermine Panama’s sovereignty are a threat to us all.”
The Pentagon’s National Defense Strategy also warned that access to the canal is in danger.
The document made public in January made securing the Panama Canal a priority and warned that in January 2025 access to the key passageway was “increasingly in doubt.”
The newly renamed Department of War “will therefore provide the president with credible options to guarantee U.S. military and commercial access to key terrain from the Arctic to South America, especially Greenland, the
Gulf of America, and the Panama Canal,” the strategy stated.
China loses two canal ports
After pressure from the Trump administration, Panama in March retook control of two ports from China that had been leased to Panama Ports Co., a subsidiary of Hong Kong’s CK Hutchison Holdings that also has close ties to the CCP.
Those ports were located at the Balboa terminal on the Pacific side and the Cristóbal terminal on the Atlantic in March.
CK Hutchison agreed to sell a 90% stake in a broader package of ports, including the two in Panama to a consortium led by BlackRock, Global Infrastructure Partners and Terminal Investment Ltd. for about $22.8 billion.
Beijing, however, had an antitrust regulator review the deal and froze it by calling the sale an inappropriate capitulation to American pressure.
Panama’s government then audited the concession to China on the ports and declared that Panama Ports operated them for two decades under an improper contract and owed back payments.
In January, the Panama Supreme Court ruled Hutchison’s concessions were unconstitutional and void, which led the government to annul the contracts in February. Interim control of the canal ports was given to Maersk and MSC instead of the stalled BlackRock consortium.
China has engaged in economic retaliation by intensely inspecting and detaining Panama-flagged ships that enter Chinese ports.
Landbridge dispute linked to CCP
Mr. Castillo, the lawyer, said he regards Landbridge’s ties to the CCP as central to the case.
“We believe the objective is to place him under enormous pressure to manufacture a claim that the China-backed Landbridge company — not the U.S.-aligned ownership group — controls this strategically important port project,” he said.
The Panama Canal Authority has plans to expand ports on both sides of the canal. One is set to be built at Corozal on the Pacific side near the canal’s entrance and a second is planned on the Atlantic side at Port Telfers Island.
Those ports will be part of an $8.5 billion infrastructure development plan through 2035 that is separate from the Panama government’s revived plan for Margarita Island.
The authority requires that a single company cannot operate the new terminals to avoid large-scale Chinese influence.
Companies from Europe, the Americas and Asia are permitted to bid on the new port project, including China, further complicating American efforts to prevent Beijing’s presence near the canal.
A spokeswoman for Landbridge did not respond to a request for comment.
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Bill Gertz
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