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The US contract to “recover” the Panama Canal is increasingly being fired from Chinese and Hong Kong authorities.
Earlier this month, BlackRock announced a $23 billion deal with CK Hutchinson, taking ownership of the Panama ports of Cristobal and Balboa, located on the edge of the Atlantic and Pacific Oceans of the canal, respectively. It will also take over Hutchinson’s control of 43 ports from 23 other countries. However, Hong Kong and Chinese leaders were able to try and get in the way.
Hong Kong leader John Lee said concerns about Tuesday’s transaction deserve “serious attention.”
The agreement between the two conglomerates was seen as a solution to President Donald Trump’s threat of reclaiming the canal after China claimed that it was using it to “rip” US ships at the cost of entry.
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CK Hutchison and BlackRock recently signed an agreement to transfer ownership of the Panama Canal. (Reuters/Carlos Giasso/File Photo)
Trump promoted the BlackRock deal to “recover” the port when the US was first announced.
Now, Beijing has launched an investigation into potential antitrust laws and national security concerns through various agencies, including state control of state market regulations, Bloomberg reported.
“If Beijing stops this deal, it’s a direct challenge to the US president on issues that he really cares about,” said Gordon Chan, a US-China relations expert. “That doesn’t work very well.”
Advantageous waterways have 5% of the world’s maritime trade passed.
CK Hutchison’s share price fell 3% on Tuesday after Lee’s comment, cancelling the scheduled press and investor briefing this week when the company released its financial report.
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Hong Kong CEO John Lee said the Panama deal “deserves serious attention.” (Reuters/Joyce Zhou)
“We oppose the abusive use of coercion or bullying tactics in international economic and trade relations,” Lee said in Trump’s apparent jab.
Commentary published in Ta Kung Pao, a Hong Kong newspaper owned by the Chinese government, claimed that the Hutchison-BlackRock agreement “permits the US to use it.” [the canal] For political purposes, it promotes its own political agenda and “to “the US subject” China’s trade and transport.”
CK Hutchison is owned by Hong Kong billionaire Li Ka-shing. Lee said business transactions must be in compliance with Hong Kong law and that the city will process transactions according to the law.
“I don’t think the Hong Kong government will take on Li Ka Shing and Hutchison, but you never know because the environment in Hong Kong is changing. That’s not getting better,” Chang said.
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Approximately 5% of the world’s maritime trade passes through the Panama Canal. (Reuters/enea lebrun/File photo)
China’s presence in the canal region allows for free access to be blocked. That could mean that at the outbreak of war in the Indo-Pacific, the US Navy could prevent the immersion of the Pacific Ocean from the Atlantic through canals.
However, the canal could also be used as leverage for China in search of pushes to ease tariffs. Trump said Monday that Chinese President Xi Jinping will visit the US in the “not too distant future.”
Trump first placed a 10% tariff on blankets on all Chinese products. In March, he raised it to 20%, claiming that China has not yet done enough to deal with fentanyl flowing from the country through the US border.
CK Hutchison’s canal ownership also faces constitutional challenges in Panama.
Panama Attorney General Kenya Isolda Polcer Diaz has filed a filing in support of two lawsuits over the renewal of a 25-year contract for Hutchison to own the port.[s] Transferring the exclusive rights of the Panama state. ”
When asked about reports that China was investigating sales, Foreign Ministry spokesman Mao said questions should be directed at other agencies.
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“In principle, I would like to emphasize that China is firmly opposed to infringing or undermining the legitimate rights and interests of other countries with economic coercion and bullying,” she said.
Last month, Panama President Jose Raul Murino said his country would not renew its participation in China’s Belt and Road Initiative.
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