There is a very usefull couple of functions for these cases: str_getchr and str_setchr

Code:
STRING *strPanel = "#1";
STRING *strText = "Location: China ";

PANEL *panLetter =
{
	digits ( 20, 20, strPanel, *, 1, 0 );
	flags = SHOW;
}

function main ()
{
	wait(1);
	var nCount = 1;
	while ( !key_esc )
	{
		str_setchr ( strPanel, 1, str_getchr ( strText, nCount ) );
		nCount += 1;
		if ( nCount > str_len ( strText ) )
			nCount = 1;
		wait(-0.5);
	}
	
	sys_exit ( NULL );
}