Trump, China ramp up Panama Canal pressure with Li Ka-Shing deal in limbo
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The US and China have been embroiled in an escalating war of words over the Panama Canal.
PHOTO: REUTERS
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HONG KONG – China dialled up scrutiny of Hong Kong billionaire Li Ka-Shing’s planned Panama ports sale
China’s market regulator said on April 27 that its review of Li-owned CK Hutchison Holdings’ sale of dozens of ports would cover all parties involved, and that the deal should not be implemented without the body’s approval.
Although the transaction concerns only CK Hutchison’s assets outside of China and Hong Kong, the regulator’s statement is seen as an assertion of Beijing’s control over businesses based in the Greater China region.
The US and China have been embroiled in an escalating war of words over the Panama Canal, which handles roughly 3 per cent of global seaborne trade, with the US and China being its two main users. It is piling further political pressure on Mr Li as he tries to sell the two Panama ports, putting him in the crosshairs of tensions between the US and China.
The escalating pressure from both sides highlights the increasingly tricky business environment that CK Hutchison and other major global companies have to navigate as trade tensions between the world’s two biggest economies ramp back up.
Mr Trump started pushing for the US to “reclaim” the waterway soon after taking office in 2025, and the latest statements from Beijing follow his call for “free-of-charge” passage of American ships through the Panama and Suez canals.
“Those canals would not exist without the United States of America,” Mr Trump wrote in a Truth Social post on April 26, saying he had asked US Secretary of State Marco Rubio to “immediately take care of” the situation.
China, meanwhile, recently told its state-owned firms to hold off on any new collaboration with businesses linked to 96-year-old Mr Li and his family, Bloomberg reported in March, irked by his plan to sell them to the global consortium.
The relevant enterprises must abide by national laws and “immediately stop the relevant transactions”, according to an opinion column in pro-Beijing newspaper Ta Kung Pao. Otherwise, “the consequences will be very serious”.
‘American consortium BlackRock’
The deal was announced in March, and involves 43 CK Hutchison-run ports in 23 countries. While work on the deal is still proceeding, including due diligence, accounting and tax checks, CK Hutchison already missed a target to sign a definitive agreement on the Panama part of the deal by April 2. If finalised, the transaction would net CK Hutchison US$19 billion (S$24.9 billion) in cash proceeds.
The Wall Street Journal reported in April that there are discussions around separating the two Panama ports from the US$22.8 billion deal to buy dozens of ports from CK Hutchison. Ta Kung Pao called it out as nothing more than a “public relations manipulation”.
“No matter how the name is changed, the subject of the transaction has always been the American consortium BlackRock,” the outlet said. BLOOMBERG
