China has rejected allegations from U.S. and Panamanian officials that inspections of Panama-flagged vessels amount to maritime coercion. Beijing said the checks are conducted under international regulations and reflect the safety record of the vessels involved.
The dispute followed Panama’s cancellation of CK Hutchison’s port concession. U.S. officials have claimed that China subsequently targeted vessels registered under the Panama flag through increased port state inspections and detentions.
In his first address to the International Maritime Organization on 7 July, U.S. Ambassador to the United Kingdom Warren Stephens urged the organization to give greater attention to the issue. He alleged that China was using its maritime and economic influence to pressure countries exercising their sovereign rights.
Panamanian President Jose Raul Mulino raised similar concerns in June. Speaking to the Organization of American States, he cited what he described as an unusual rise in inspections and detentions and said the increase had no technical or safety justification.
Chinese Foreign Ministry spokesperson Lin Jian disputed those claims during a regular briefing on 13 July. He said China was conducting port state inspections lawfully and responsibly in accordance with international requirements for visiting vessels.
Lin said Panama-flagged vessels had recorded several casualties in Chinese waters that met or exceeded statutory accident classification thresholds. He also stated that incidents involving Panama-flagged ships occurred more frequently than those involving vessels from any other flag state.
According to Lin, Panama-flagged vessels represented less than 20 percent of foreign ship calls at Chinese ports so far in 2026. He said they were linked to around 50 percent of accidents, as well as the resulting deaths and missing-person cases. Chinese officials have also cited accidents involving coastal fishing boats as a reason for the inspections.
The U.S. Federal Maritime Commission is also examining the issue. FMC Chairman Laura DiBella said Panama-flagged ships carry a meaningful amount of U.S. commerce and noted that the commission can investigate foreign government regulations or practices that create unfavorable conditions for U.S. foreign trade.
DiBella said the FMC also has authority to introduce remedial measures under the laws it administers.
An analysis released by Lloyd’s Intelligence found that some vessels had transferred from the Panama registry during the period of increased inspections and detentions. Although the analysis indicated that the number of Chinese inspections and detentions appeared to be declining, vessels were continuing to move to the Bahamas and Marshall Islands registries.
Chinese officials said the inspections would continue to support the safe operation of vessels.
