Chinese Foreign Minister Wang Yi is in Panama to inaugurate China’s embassy following the establishment of diplomatic relations agreed in summer. The facility will provide a visible symbol of the new diplomatic ties between the countries, and could open the floodgates to new Chinese investment.

Wang arrived in Panama City on Saturday for his first official visit, and was received by Panamanian President Juan Carlos Varela and Vice President Isabel De Saint Malo in the Palace of Las Garzas.

Before chairing the opening of the embassy, Wang will have a private talk with Varela to discuss 12 priority points set out in the new bilateral agenda, including tourism, trade and security, De Saint Malo explained earlier this week.

China's Foreign Minister Wang Yi and Panama's President Juan Carlos Varela attend a welcome ceremony before a meeting at the presidential palace in Panama City, Panama on September 16, 2017. /Reuters Photo

Wang’s visit to Panama comes three months after the Central American country established diplomatic relations with China and severed its ties with Taiwan.

In practice, China and Panama had close contacts for decades. Panama has the largest Chinese community in Central America, and China is the second-biggest user of the Panama Canal.

"Before these diplomatic relations, there were companies that did not feel comfortable coming to Panama and investing here," said the country's vice foreign minister, Luis Miguel Hincapie. "We believe that now this will change, and more business will come."

There are still a few other countries in the region that do not have diplomatic relations with Beijing. "Panama’s decision sets an example and sends a very clear message to other countries in Central America and the Caribbean," said Wang Weihua, the charge d’affaires of the Chinese embassy.

Before his visit to Panama, the Chinese foreign minister also met with Costa Rican President Luis Guillermo Solis and the foreign minister in San Jose.