Just 17 vessels flying the Panamanian flag were detained at mainland Chinese ports from July 1-23, a marked decrease from the peak of 140 detained in May, according to Tokyo MOU data. The figure now is near the monthly average detentions of about 21 in 2025.

The return to normal came as Panama and China agreed to renew their bilateral maritime transport agreement, despite the two countries’ largely unresolved disputes over operational control of two Panama Canal ports. The US has repeatedly vowed to curb Chinese influence in the waterway.

The Panamanian government attributed the “sharpest” decline of detentions to a “consensus” reached with China when its diplomats visited Beijing between July 16 and 17.

Beijing had appeared to loosen its crackdown on Panama-flagged ships in June, when 64 detentions were made, compared to 140 in May and 80 in April, Tokyo MOU data showed.

Beijing’s enforcement drive has triggered a record exodus from the Panama registry, with a total of 264 cargo ships above 10,000 dwt reflagging in June according to preliminary Lloyd’s List Intelligence data. The exodus first became evident in April, when 78 ships left — more than double the first-quarter average of 32.

“Talks between the governments of Panama and China have begun to deliver results,” the Panamanian Ministry of Foreign Affairs said on Thursday in a statement.

Going forward, the two sides would seek to maintain “constructive” relations on port and shipping matters, including preferential port treatment and expedited administrative procedures, the ministry said.

Panama said it remained “optimistic” that conditions for vessels flying its flag would continue to improve after the drop in detentions, with which its government was “very satisfied”.

China slightly softened its tone about Panama after the talks, ceasing to cite high accident rates of Panama-flagged ships in Chinese waters in defence of its intensified port state control inspections.

Asked on Tuesday about the renewed maritime agreement with Panama, the Chinese Ministry of Foreign Affairs said Beijing has “always” pursued relations based on equality and mutual benefit.

“Deepening China-Panama co-operation in all areas serves the interests — and fulfils the expectations — of both countries and their people,” it said.

The maritime dispute stems from Panama’s decision in late February to void contracts for two key Panama Canal ports operated by a subsidiary of Hong Kong’s CK Hutchison, transferring temporary concessions to Maersk and Mediterranean Shipping Co following repeated US pressure.

Though Panama defended the decision as “genuinely Panamanian”, Beijing accused it of “bowing to hegemony” without naming the US.

China subsequently ramped up detentions of Panama-flagged vessels at its ports, insisting its inspections are “beyond reproach” and not targeting any specific flag. Meanwhile, Beijing urged Panama to “correct mistakes” on the annulment of Hutchison’s contracts.

Panama ranks as the world’s second-largest ship registry, behind Liberia and ahead of the Marshall Islands.