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China could have a major impact on the Panama Canal after the collapse of the proposed deal between US-based BlackRock and Hong Kong’s CK Hutchison.
The original agreement would have transferred control of dozens of international ports, including two in Panama, to a consortium including BlackRock. The deal was reportedly welcomed by former President Donald Trump, who expressed support to reduce China’s influence on the canal and who had the idea of the US “recovering” its strategic waterways.
However, Beijing was pushed back. China advocates the inclusion of state-owned shipping giant COSCO in the transaction, indicating that it shows a direct stake, not just indirect via Hong Kong-based Hutchison in canal operations.
Amidst rising pressure from China and the threat of anti-titan investigations, CK Hutchison announced on Monday that the exclusive negotiation window with BlackRock has expired. However, the company also shows openness to restructuring transactions.
China and Hong Kong threaten to block the sale of Panama Canal Port to BlackRock in the US
It said it would remain open to debate in terms of inviting key strategic investors. [People’s Republic of China] According to the company, it requires a change in transaction structure and participant composition to obtain approval from “all relevant authorities.”
Aerial view shows a cargo ship docked at the Port of Balboa operated by the Panama Port Company on February 1, 2025 at the Panama Canal in Panama City.
The original $23 billion deal included transferring ownership of 43 ports to 23 countries, including two important Panama ports at both ends of the Balboa and Cristobal canal. CK Hutchison has been running both since 1997. The company is owned by the family of Li Ka-Shing, the wealthiest man in Hong Kong.
China’s growth footprint in Latin American infrastructure has long been a bipartisan alarm in Washington. However, Trump stands out as the first modern US president to propose to reclaim the Panama Canal, which the United States was completed in 1914 and handed over to Panama under a treaty signed during the Carter administration in 1977.
China’s billion-dollar footprint near Florida’s coast poses national security risks for the US, experts warn
“China operates the Panama Canal and we didn’t hand it over to China – we gave it to Panama – and we’ll get it back,” Trump recently declared.
One analyst believes China could ultimately be ruled out of Panama Port ownership, but it has gained control of most other assets in large transactions.
“China claims this is Quid Pro Quo. Other global ports have COSCO participation. And obviously, COSCO is already a major global port holder,” said Dane Chamorro, head of global risk analysis for control risk at consulting firms in an interview with Fox News Digital.
The cargo ship will cross the Agua Clara Rock of the Panama Canal, Colon, Panama on September 2, 2024 (AP Photo/Matias Delacroix, File)
The family of Hong Kong billionaire giant Li Ka-Shing owns CK Hutchison. (Reuters/Bobby Yip)
“From a US perspective, they might say, ‘It’s okay, amazing. I got Hutchison, or China (because they tend to mention each other), and they left two Panama ports.” But in the long run, it could lead to more ports worldwide falling into the hands of Chinese state-owned enterprises. ”
If that happens, Cosco will “have far apart from dominant port owners and operators all over the world,” Chamorro said, through this broader integration. “That coincides with the fact that China is the world’s largest trade economy, the largest manufacturing economy, and the largest shipbuilder.”
Chamorro also noted that US companies are not operating in the port industry on the same global scale as companies in China, Hong Kong and Singapore.
The failed Hutchison BlackRock deal highlights the unstable stance of Hong Kong’s business under increasing pressure from Beijing to prioritize national loyalty, even when threatening relationships with Western partners.
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Meanwhile, Panama claims it retains full sovereignty over the canal itself, claiming that the operation of Hutchison’s port facilities will not affect China’s operation.
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