Panamanian President Ernesto Perez Balladares miffed China several months ago, when he invited Taiwanese President Lee Teng-hui to attend a conference on the Panama Canal. China, seeking to isolate Lee, demanded that the invitation be withdrawn. When that did not happen, it pressured the other invited heads of state to back out of the meeting. When the conference got under way this week, only four were present - those from Panama, Taiwan, Nicaragua and Honduras. Perez Balladares, too, must have felt tremendous pressure to back down.
China has the economic potential to help Panama far more than tiny Taiwan.
Also, China is a major user of the canal - and a Chinese company has concessions to operate canal ports of entry. With users already threatening a boycott if Panama doesn't keep the fees down when it takes control in 1999, he doesn't need more complications. Yet, Perez Balladares stood firm. Not only did he refuse to withdraw the invitation, he and Lee issued a joint statement pledging to work for broader ties and to seek a free-trade agreement. Perez Balladares is one of the few world leaders to stand to up China's economic bullying.