Panama reports improved China relations following spat

Panama's President Jose Raul Mulino on Thursday said tensions with China had "reduced", after a fraught period during which Beijing was accused of detaining Panamanian-flagged ships in Chinese ports.

The United States and China accuse each other of seeking to control the Panama Canal, a vital trade link between the Atlantic and Pacific oceans.

Following a decision by the Panamanian Supreme Court in January, Panama took control of two of the canal's ports previously operated by a Hong Kong-based conglomerate.

Mulino subsequently reported that the immobilization of his country's vessels at Chinese ports had increased "exponentially," which he likened to retaliation for the ruling.

On Thursday, however, Mulino said the number of detained Panamanian vessels had dropped "somewhat."

"Thanks to reason, that tension, which had escalated sharply, has begun to ease," Mulino told reporters.

He described a message sent by the Chinese government to Panama seeking a legal solution as "a great step." 

Such squabbles should not be resolved "through detentions in ports," Mulino said.