PANAMA - The establishment of diplomatic relations between China and Panama in June 2017 could be a big boost for the Central American country's agricultural sector, a senior Panamanian official has said.

Agriculture is a crucial part of the Panamanian economy, employing 17 percent of the workforce but facing major challenges.

In a recent interview with Xinhua, Panama's Deputy Minister of agricultural development Esteban Giron said that collaboration with China offered new forms of cooperation and transfers of technology which would boost production.

For Giron, China's vast experience and technological development have made it a key ally for Panama to strengthen its rural economy, since over 70 percent of its economy comes from services.

"Relations with China are very important, mainly because we are establishing technical cooperation consisting in the training of our technical personnel on biosecurity and agricultural best practices, including a network of laboratories," he indicated.

The setting up of laboratories dedicated to animal and crop health are key for Panama to not only guarantee international quality standards for biosecurity, but also increase the application of modern technology, explained Giron.

These laboratories will be staffed by Panamanians but will be open to the exchanging of experiences with Chinese technicians, while most of the equipment will be provided by China.

While Giron said the exact amounts needed for this investment had not been set, they would be sufficient to truly bring a new technological dimension to Panama's agricultural sector.

"We need machinery which is adapted to the needs of every production niche. For large producers, if they can import machinery more cheaply from China, wonderful, but it must have the same quality as that currently being imported," he explained.

According to the deputy minister, the priority areas that could interest China in Panama have been defined in an agreement signed by President Juan Carlos Varela, since relations were established between both countries last year.

From now till October, Panama will present China with a number of projects that could draw investment, including in agriculture.