A huge Chinese ship carrying almost 9,500 metal cargo containers entered the newly expanded Panama canal on 26 June, ushering in a new era for global trade.

The ship was greeted by fireworks and thousands of Panamanians who gathered at Cocoli locks to celebrate. The Chinese vessel, Cosco Shipping Panama was pulled by many tugboats into the new Agua Clara locks in Colon province, almost 50 miles north of Panama City.

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Panama's President Juan Carlos Varela, said, "This is the route that unites the world." He added, "This is where it all began. It's been 500 years of history no one can change."

As the vessel headed for the Pacific Ocean, the canal administrator, Jorge Luis Quijano, said, "This new transit route is the tip of the iceberg in making Panama once again the logistic centre of the Americas. And it represents a significant opportunity for the countries of the region to improve their infrastructure, increase their exports."

The expansion of the canal began in 2007 and was due to end in 2014 but strikes and disputes over costs delayed it for almost two years. The $5.2bn (£3.8bn) project launched officially with the transit of the 158ft wide, 984ft long (48.2 m by 300 m) container ship.

Oscar Bazan, the Panama Canal Authority's executive vice-president for planning and commercial development, said: "There is evidence that the Panama canal, with this expansion, is an important player not only for regional maritime commerce but worldwide.

"The canal is a winning bet. [Clients] will benefit from saving not only time but also money, because the canal is a route that shortens distance."

According to reports, the canal that opened in 1914, could accommodate ships carrying 5,500 cargo containers but the new locks can handle ships ferrying in about 13,000 containers. Around 35 to 40 vessels transit the waterway every day. The government hopes the expansion of the canal will increase revenues, which is reported to be around $2.6bn (£1.9bn) in 2015.

The expansion comes against the backdrop of a lull in global shipping due to a drop in oil prices and an economic slowdown in China - the canal's second largest customer.

The canal could face competition from a new expansion in Nicaragua, which is building a longer, deeper and wider canal than Panama. It is being built by a Chinese firm and is estimated to cost about $50bn (£32bn).