Panama forms bond with China and ditches Taiwan

Panama established formal diplomatic ties with China and broke with Taiwan on Monday in a major victory for Beijing that bolsters its claims of sovereignty over what it regards as a renegade island.

Panamanian President Juan Carlos Varela said in a televised address Panama was upgrading its commercial ties with China and establishing full diplomatic links with the second most important customer of its key shipping canal.

"I'm convinced that this is the correct path for our country," Varela said.

Panama's government said in a statement that it recognized there was only one China, with Taiwan belonging to the Asian giant, and that it was severing ties with Taipei.

Source: Reuters