Beijing’s Warning Number 4 for Li Ka-shing’s Hutchison Over Panama Ports Deal
Beijing’s offices overseeing Hong Kong affairs have signaled their anger at tycoon Li Ka-shing’s CK Hutchison Holdings for the fourth time by reposting a news article which accuses the company of not maximizing its profits in the “unusual deal” to sell its Panama ports to a consortium led by US firm BlackRock. The Hong Kong and Macau Affairs Office and the central government’s liaison office in the city on Thursday posted on their websites an article by pro-Beijing newspaper Ta Kung Pao, which quoted international business experts as saying the sale was “inconsistent with the business logic of seeking profit”. “This BlackRock deal not only undervalues the assets but has a very short decision-making process instead of adopting the ‘highest bidder wins’ approach,” it said.
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Here is what we know: BlackRock will not sign an agreement next week to buy two Panama ports from Hong Kong’s CK Hutchison, as originally planned.
Why it matters: President Trump touted this deal in his recent address to Congress, and it seemed like an offramp for U.S. threats to retake control of the Panama Canal.
Zoom in: BlackRock and CK Hutchison remain in active discussions and due diligence, but the signing date could slip by weeks or even months, according to a source familiar with the situation.
- At issue is growing political opposition from Beijing, which recently called the deal a “betrayal.”
- The South China Morning Post first reported the delay, which was confirmed by Newsroom Panama.
- There doesn’t appear to be any problems with a larger deal between BlackRock and CK Hutchison, which covers 43 ports in 23 countries, although the intention is to close both that, and the Panama deal, together.
The bottom line: Don’t be surprised if this becomes a negotiating chip in tariff talks between the U.S. and China.
Panama Canal ports sale has been put on hold by Chinese regulators
