Panama plans to attract more Chinese investment as an engine for the country's steps to develop itself into advanced economy.

"Cooperation with China is very crucial in our process of developing Panama into a developed economy in the world and we expect more Chinese companies to enter the air transportation and infrastructure industries in our country," Olmedo Alfaro, president at Panama Pacific Special Economic Area, said during a news conference on Friday.

Panama is China's fifth-largest trading partner in Latin America. From January to July, bilateral trade between the two countries has reached $6.74 billion and China is the second biggest user of the Panama Canal.

However, bilateral investment has been increasing at a slow pace because of Chinese investors' thoughts on investment risks in the nation. Bao Esheng, former chief representative of China's commercial office in China, said Panama is a promising investment destination for Chinese investors and there is a lot potential in industries including telecommunications, infrastructure and services.