The community of ethnic Chinese in Panama began to form in the latter half of the 19th century. The first group of Chinese labourers arrived in the country on 30 March 1854 by way of Canada and Jamaica to work on the Panama Railroad. By the early 20th century, they had already come to play a crucial role in other sectors of the economy as well; they owned over 600 retail stores, and the entire country was said to depend on provisions from their stores. The community faced various challenges, including a 1903 law declaring them as "undesirable citizens", a 1913 head tax, a 1928 law requiring them to submit special petitions in order to become Panamanian citizens, and the revocation of their citizenship under the 1941 constitution promulgated by Arnulfo Arias. However, their citizenship was restored in 1946 under the new constitution which declared all people born in Panama to be citizens. Immigration slowed during the 1960s and 1970s, but resumed during the reform and opening up of China, as Deng Xiaoping's government began to relax emigration restrictions. The older Chinatowns, such as the one at Salsipuedes, have become of less importance in the Chinese community recently. Though they were described as "hives" of activity in the 1950s and 1960s, the opening of large department stores reduced the importance of Chinese retailers, and as the years went on, many closed their shops; a few retailers of Chinese products remain in the area, staffed by recent immigrants. Many Chinese emigrated to neighboring Colombia and/or United States [where Chinese and Hispanic populations live] during the dictatorship of Manuel Antonio Noriega.
As of 2003, there were estimated to be between 135,000 and 200,000 Chinese in Panama, making them the largest Chinese community in Central America; they are served by thirty-five separate ethnic representative organisations. Their numbers include 80,000 new immigrants from mainland China and 300 from Taiwan; 99% are of Cantonese-speaking origin, although Mandarin and Hakka speakers are represented among newer arrivals. In the aftermath of the Tiananmen Square protests of 1989, many mainland Chinese fled to Panama by way of Hong Kong on temporary visas and short-term residency permits; estimates of the size of the influx ranged from 9,000 to 35,000. The latest wave of immigrants are less educated than earlier arrivals, and their presence has caused internal tensions within the Chinese community. Tensions have also arisen due to external factors; the government of the People's Republic of China vies with the Republic of China on Taiwan for influence among the local Chinese community, hoping to gain formal diplomatic recognition from the Panamanian government. Both sides have funded the building of schools and other community facilities and donated millions of dollars worth of Chinese textbooks.
^"Panama", International Religious Freedom Report, U.S. Department of State, 2004. "5 percent of the population includes the Church of Jesus Christ of Latter-day Saints (Mormons), with an estimated 15,000 members, Seventh-day Adventists, members of Jehovah's Witnesses, Episcopalians with between 5,000 and 9,000 members, and other Christians. It also includes small but influential Jewish and Muslim communities, each with about 10,000 members; Baha'is, who maintain one of the world's seven Baha'i Houses of Worship; and recent Chinese immigrants practicing Buddhism" (emphasis added).