Showing posts sorted by date for query CK Hutchison. Sort by relevance Show all posts
Showing posts sorted by date for query CK Hutchison. Sort by relevance Show all posts

Sunday, March 30, 2025

TRADE WAR TOO

Report: Under Pressure from China Hutchison Will Delay Panama Terminal Sale

Balboa Panama port
Reports are that Hutchison will delay the signing of the definitive sale agreement for the terminals in Panama (Hutchison file photo)

Published Mar 28, 2025 12:33 PM by The Maritime Executive

 


The controversial deal by CK Hutchison to sell its two port operations in Panama is reportedly going to be delayed. The South China Morning Post and Chinese-controlled newspapers are reporting that the target date of April 2 for the signing of definitive documentation will not proceed but also said this does not mean the deal is canceled.

Chinese officials later confirmed that the State Administration for Market Regulation would be reviewing the transaction. The South China Morning Post reports that the officials said the review was to “ensure fair competition in the market and safeguard the public interests.” Bloomberg adds that the review will be looking for potential security or antitrust violations.

Hutchison on March 4 announced that it had reached principal agreements with a consortium of U.S.-led BlackRock and MSC Mediterranean Shipping Company’s TiL group which owns and operates terminals. The total deal valued at $23 billion is for the sale of 80 percent interest in terminals in 43 ports in 23 countries outside China operated by CK Hutchison. In a parallel agreement, Hutchison said it would sell 90 percent interest in the Panama company that operates the terminals in Balboa and Cristobal, Panama at each terminus of the Panama Canal.

Hutchison said that “fundamental and essential terms” of the two transactions had been agreed in principle, subject to definitive documentation. It reported that the definitive documentation for the Panama portion of the transaction was expected to be signed on or before April 2. It also entered into exclusive negotiation and non-disclosure arrangements with the BlackRock-TiL consortium.

Chinese officials reacted negatively to the news of the sale as they saw it as U.S. intervention and worried about threats to Chinese shipping and trade. According to the media reports, China has been increasing the pressure on CK Hutchison including reports this week that the government had ordered that there be no new deals with Li Ka-shing, the Hong Kong billionaire who controls Hutchison, and his family.

Panama which has also been under pressure from the United States announced that it would be reviewing the transaction. Previously Panama had moved to review the contract with Hutchison and the Panama government filed notice that it was withdrawing from China’s Belt & Road initiative.

Media reports in Asia suggested that behind-the-scenes talks were happening between the company and government officials in Hong Kong. Hutchison has declined to make public comments and also canceled a planned briefing with investors after its year-end financial report.

Trump has hailed the deal for the Panama terminals and took credit with BlackRock for making it happen. MSC has remained quiet about the deal letting BlackRock be the center of attention in the media reporting on the transaction.

Saturday, March 29, 2025

US, China raise the stakes in Panama Canal ports row


By AFP
March 29, 2025


The CK Hutchison deal allowed US President Donald Trump to claim credit for "taking back" the Panama Canal (pictured) according to analysts - Copyright AFP ARNULFO FRANCO

Holmes Chan, with Luna Lin in Beijing

China’s fury at the sale of Panama Canal ports to a US-led consortium reflects how container hubs have become prized currency as Beijing and Washington vie for global influence, analysts say.

Hong Kong conglomerate CK Hutchison this month sold 43 ports in 23 countries — including operations in the vital Central American canal — to a group led by giant asset manager BlackRock for $19 billion in cash.

After two weeks of rhetoric, Beijing hardened its response on Friday and confirmed that antitrust regulators will review the deal, likely preventing the parties from signing an agreement on April 2 as planned.

Speaking before the review was announced, experts told AFP that the deal allowed US President Donald Trump to claim credit for “taking back” the canal as part of his “America First” agenda.

“The US (created) a political issue at China’s expense and then has been able to declare victory,” said Kurt Tong, managing partner at The Asia Group and a former top US diplomat to Hong Kong.

“That doesn’t feel good in Beijing.”

Some of the ports being sold are in nations that participate in Beijing’s Belt and Road Initiative (BRI) — a global development framework championed by Chinese President Xi Jinping.

Ports are crucial to that network and China “has been notably successful in this area”, said Henry Gao, a trade law expert at the Singapore Management University.

Last month, Panama formally exited the BRI following a visit from US Secretary of State Marco Rubio.

“There is indeed a growing trend of ‘weaponising’ ports and trade infrastructure as tools of geopolitical leverage,” Gao said.



– ‘Nightmare’ scenario? –



On March 4, CK Hutchison sent shockwaves through China’s shipping industry by announcing a deal of “unprecedented scale”, according to Xie Wenqing, a port development researcher at the Shanghai International Shipping Institute.

Chinese shipping firms questioned whether they could ensure neutral passage once the ports changed hands, he told AFP.

“There are concerns about additional costs for Chinese ships or discriminatory treatment in terms of queuing orders,” he added, highlighting the long-arm jurisdiction of US authorities.

The deal — coupled with recent US tariff hikes — could undermine China’s manufacturing dominance, argued Wang Yiwei, director of the Institute of International Affairs at the Renmin University of China.

“Increased inspections and additional docking costs would erode China’s competitive edge and disrupt global supply chains,” he noted.

The United States has used various justifications to target key infrastructure projects under the Belt and Road Initiative “to strip away these assets and weaken China’s position as the world’s factory”, Wang added.

John Bradford, executive director of the Yokosuka Council on Asia-Pacific Studies, said the deal would not serve China’s interests but said some concerns were “overblown”.

Port operators such as CK Hutchison are commercial entities constrained by law and cannot decide matters of national sovereignty, for example whether a ship could visit a port or not.

“If (operators) were to blatantly favour one company over another, that would generally speaking… be illegal,” Bradford said.

“Most countries have laws which say you have to treat different customers similarly, so the nightmare scenarios are not particularly realistic.”



– Hong Kong’s role –



Beijing’s next steps in scrutinising CK Hutchison may also have far-reaching implications on Hong Kong and its role as China’s business gateway to the world, according to analysts.

“This whole Panama ports issue has refocused attention on the question (of) whether Hong Kong is a good place to put assets or to do business,” said Tong, the former diplomat.

“Certainly the foreign business community operating in Hong Kong is watching this issue very closely.”

CK Hutchison is registered in the Cayman Islands and the assets being sold are all outside China.

That did not stop the State Administration for Market Regulation from announcing the antitrust review on Friday.

Jet Deng, a senior partner at the Beijing office of law firm Dentons, said China’s antitrust laws can be applicable outside its borders, similar to those of the United States and the European Union.

Once a deal meets China’s reportability threshold, a declaration is required even if the transaction takes place abroad, as long as the parties involved had substantial operations in mainland China, he said.

Firms that fail to declare may be fined for up to 10 percent of their operating income from the preceding year, Deng added.

Hung Ho-fung, a political scientist at Johns Hopkins University, said Beijing risks spooking “cautious” foreign firms that have already lowered their business exposure in Hong Kong.

If the deal crumbles under Chinese pressure, people may believe that Hong Kong is converging with mainland China where “national security considerations are of utmost importance in any business deal”, Hung said.

Thursday, March 20, 2025

Hong Kong’s embattled CK Hutchison says profits down in 2024


By AFP
March 20, 2025


CK Hutchison this month offloaded its global ports business outside China -- including operations in the Panama canal -- to a group led by giant asset manager BlackRock for $19 billion in cash - Copyright AFP/File MARTIN BERNETTI


Holmes CHAN

Embattled Hong Kong conglomerate CK Hutchison Holdings, caught in a US-China spat over control of the Panama Canal, said on Thursday that profits fell 27 percent in 2024.

CK Hutchison this month offloaded its global ports business outside China — including operations in the canal — to a group led by giant asset manager BlackRock for $19 billion in cash.

The parties expect to sign a “definitive agreement” by April 2 concerning the Panama Ports Company, which has operated two of the five ports at the canal since 1997 via a government concession.

The deal came after weeks of pressure from US President Donald Trump, who refused to rule out a military invasion of Panama to “take back” the vital waterway from alleged Chinese control.

Thursday’s results announcement made no mention of the BlackRock deal.

“On the whole, the Group’s underlying operating results were relatively stable” last year despite a one-time issue related to its Vietnam telecommunications business, chairman Victor Li, son of billionaire founder Li Ka-shing, said in a filing with the Hong Kong Stock Exchange.

But CK Hutchison said its “ports and related services” division saw an 11 percent jump in revenue to $5.8 billion.

Earnings before interest, taxes, depreciation, and amortisation soared 19 percent year-on-year to $2.1 billion, the firm said.

“There may be headwinds with supply chain disruptions anticipated in the early part of the year due to shipping lines transitioning into their new alliances, as well as ongoing geopolitical risk impacting global trade,” Li said as part of the ports division’s 2025 outlook.

– Beijing scrutiny –



Shares in CK Hutchison jumped more than 20 percent in Hong Kong after the ports deal was first announced on March 4.

But Beijing made its displeasure known last week via two government offices overseeing Hong Kong affairs, which republished newspaper articles criticising the deal as “spineless” and “betraying and selling out all Chinese people”.

Hong Kong leader John Lee also said on Tuesday that concerns about the sale “deserve serious attention”, adding that the city will “handle it in accordance with the law and regulations”.

CK Hutchison cancelled its post-earnings press conference on Thursday and has not responded to multiple AFP enquiries.

Bloomberg News has reported citing unnamed sources that senior Chinese leaders have ordered government agencies including the State Administration for Market Regulation to scrutinise the deal.

The conglomerate is registered in the Cayman Islands and the assets being sold are all outside China.

Following years of diversification, operations in mainland China and Hong Kong made up just 12 percent of CK Hutchison revenue last year, according to Thursday’s results.

The conglomerate had previously claimed to have “the world’s leading port network”, which spans 53 ports in 24 countries.

But in terms of revenue, CK Hutchison’s ports division pales in comparison to its worldwide business interests in finance, retail, infrastructure and telecoms.

In Hong Kong, CK Hutchison is known for its founder, Li Ka-shing, the city’s wealthiest man and nicknamed “Superman” for his business savvy.

The 96-year-old enjoyed close ties with three generations of top Chinese leaders, but the bonhomie faded after Xi Jinping took power.

Over the past decade, Chinese state media has criticised Li for his apparent decision to divest from some Chinese markets and for supposedly showing sympathy to Hong Kong pro-democracy protesters in 2019.

Wednesday, March 19, 2025

 

Hong Kong’s Chief Says Hutchison’s Port Sale Requires “Serious Attention"

Hong Kong Chief Executive John Lee
Hong Kong's Chief Executive spoke out regarding the sale of Hutchison's foreign ports (HK Government file photo)

Published Mar 18, 2025 4:04 PM by The Maritime Executive

 

 

The Chinese government continues to apply pressure after the news of CK Hutchison’s planned sale of its international port operations, including in Panama to a partnership between U.S. investment group BlackRock and MSC Mediterranean Shipping Company’s TiL ports group. The deal has become mired in the politics between Donald Trump and China.

While Beijing has officially remained silent on the deal, it has used proxies to increase the pressure against Hutchison and Li Ka-shing, the tycoon behind the company. He has long been seen at odds with the Communist Party but when CK Hutchison announced plans to sell its foreign port operations early in March it called the deal “purely commercial,” and said it was “unrelated to recent political news reports,” in a veiled reference to Trump’s assertions regarding the Panama Canal. 

The company, headquartered in Hong Kong, has largely gone silent in the face of the campaign being waged in the media. Yesterday, the company said it would not hold its normal briefings with investors and the media when it releases its financial results.

In a regularly scheduled press conference, Hong Kong’s Chief Executive John Lee spoke out against the proposed sale echoing last week’s pressure from a newspaper closely linked to the Community Party. Analysts highlight that historically Hong Kong has not asserted legal rights to review transactions selling assets to foreign companies, unlike the mainland government that closely controls foreign asset sales.

Lee speaking to reporters cited the “extensive discussions” related to Hutchison’s proposed sale saying it reflects “society’s concern” over the sale which last week the newspaper called unpatriotic and against national interests. Today, Lee said, “These concerns deserve serious attention.”

He said that any transaction “must comply with the legal and regulatory requirements. Hong Kong will handle it in accordance with the law and regulation.”

Hutchison highlighted when announcing its plan that the deal, which involves a total of 43 ports in 23 countries, does not involve its Chinese port operations. Further, the sale of the two terminals in Panama is in a parallel transaction subject to the review of the Panama government and separate from the other international ports.

China has said it views the deal as coercion by the United States and efforts to extend the U.S.’s dominance over China and others.

“The Hong Kong Special Administrative Region Government urges foreign governments to provide a fair and just environment for enterprises, including enterprises from Hong Kong,” Lee told reporters today. “We oppose the abusive use of coercion or bullying tactics in international, economic, and trade relations.”

At the same time, it was reported that China sent a delegation to Panama over the weekend. Under pressure from Trump, Panama has sought to back away from its close relationship with China including serving notice that it would not renew its participation in the Belt and Road initiative. The Panama Government continues to assert that the canal belongs to Panama but said it would review the proposed transaction between Panama Ports controlled by Hutchison and the BlackRock-MSC partnership. Earlier, Panama said it was reviewing the contract awarded to Hutchison to run the two terminals.

Hutchison and BlackRock agreed in March to enter into exclusive negotiations to finalize the terms of the transaction. The companies set a target of on or before April 2 to sign definitive documentation for the Panama Ports Corporation portion of the deal. It said that the acquisition of the HPH Ports Sale Perimeter would proceed on “an expedited basis” subject to the BlackRock-TiL Consortium conducting normal and usual confirmatory due diligence, settlement of definitive documentation, and receipt of any necessary regulatory approvals, amongst others.

Tuesday, March 18, 2025

Hong Kong leader says concerns over Panama ports deal warrant ‘attention’


By AFP
March 18, 2025


The business empire of Hong Kong's richest man, Li Ka-shing, sold its Panama Canal port operations to a US-led consortium following pressure from US President Donald Trump - Copyright AFP/File MARTIN BERNETTI

Hong Kong leader John Lee on Tuesday said criticism of city conglomerate CK Hutchison’s sale of its Panama Canal ports deserved “serious attention”, after Beijing authorities repeatedly slammed the deal.

The business empire of Hong Kong’s richest man, Li Ka-shing, sold most of its port operations — including those in the canal — to a US-led consortium this month following pressure from US President Donald Trump.

But Beijing has upped pressure on the firm since, with two Chinese government offices managing Hong Kong affairs republishing newspaper articles last week blasting the transaction and questioning whether CK Hutchison sided with the United States over China.

“There have been extensive discussions in society about the issue and this reflects society’s concern over the matter,” Lee, the chief executive of the largely autonomous Chinese city, told reporters.

“These concerns deserve serious attention.”

Bloomberg News reported on Tuesday, citing unnamed sources, that senior Chinese leaders have ordered several government agencies — including the State Administration for Market Regulation — to scrutinise the deal.

This examination by Beijing does not necessarily result in follow-up action, the sources told Bloomberg, asking not to be identified to discuss private deliberations.

Shares of CK Hutchison in Hong Kong fell nearly four percent on Tuesday morning.

For months, Trump has complained that China controls shipping in the Panama Canal, which was built by the United States more than a century ago to link the Pacific and Atlantic oceans.

The US president repeatedly threatened to “take back” the canal, which was handed over to Panama in 1999.


– ‘Bullying tactics’ –




Before the sale, CK Hutchison’s subsidiary in Panama had managed two of the five ports at the canal — one on the Cristobal, Atlantic, side and the other on the Balboa, Pacific, side — via a government concession since 1997.

CK Hutchison, one of Hong Kong’s largest conglomerates, said the deal was unrelated to recent political news.

Lee on Tuesday urged foreign governments to “provide a fair and just environment” for Hong Kong enterprises, without calling out the United States by name.

“We oppose the abusive use of coercion, of bullying tactics in international economic and trade relations,” he said.

Lee said any transaction must comply with legal and regulatory requirements, adding that Hong Kong would “handle it in accordance with the law and regulations”.

The Hong Kong and Macao Work Office — an office in Beijing overseeing Hong Kong affairs — republished a newspaper article last Thursday asking CK Hutchison “which side it stands on”.

Two days later, it ran another piece critical of the deal, which was later republished by the Liaison Office, the top Beijing authority based in Hong Kong.

AFP has contacted the conglomerate for comment.

Outspoken Hong Kong ex-leader CY Leung added to the chorus of criticism, saying “some Hong Kong businesspeople mistakenly believe that ‘businesspeople have no homeland'”.

“American businesspeople can and will do only things aligned with US interests… the same applies to China,” Leung wrote on Facebook on Monday.


Hong Kong’s Hutchison under fire again for Panama ports deal


By AFP
March 15, 2025


View of the Port of Balboa, which was managed by CK Hutchison Holdings - Copyright PERUVIAN NAVY/AFP Handout

Hong Kong conglomerate CK Hutchison is under renewed pressure from Beijing after selling its Panama Canal ports, with Chinese authorities publishing newspaper criticism of the deal for the second time in three days.

Last week the business empire of Hong Kong’s richest man, Li Ka-shing, sold most of its ports operations — including those in the canal — to a US-led consortium following pressure from US President Donald Trump.

In a statement, CK Hutchison Holdings said it would offload a 90-percent stake in the Panama Ports Company and sell a slew of other non-Chinese ports to a group led by giant asset manager BlackRock for $19 billion in cash.

On Saturday, the Hong Kong and Macao Work Office — the Beijing-based authority in charge of Hong Kong affairs — reposted a newspaper editorial titled “Great entrepreneurs have always been outstanding patriots”.

The article, originally published by the Beijing-backed newspaper Ta Kung Pao in Hong Kong, said many Chinese people have questioned “how so many important ports can be so easily handed over to ill-meaning American forces”.

“If (entrepreneurs) fail to see the true nature of American politicians… and choose to dance with them, perhaps they can do a mega-deal and get rich for a while, but in the end they have no future and will be scorned by history,” the piece read.

The same article was also republished in full on Saturday by the Liaison Office, the top Beijing authority based in Hong Kong.



– ‘Choose a side’ –



CK Hutchison stocks in Hong Kong plunged more than six percent on Friday after Chinese authorities republished an op-ed telling the company to choose “which side it stands on”.

That older article appeared in the commentary section of Thursday’s Ta Kung Pao, which is owned by a subsidiary of the Liaison Office.

In contrast, Saturday’s editorial was excerpted on the front page and its full text ran on page three.

The paper’s website published three more opinion pieces by outside contributors on Sunday morning, all critical of the deal.

CK Hutchison has not responded to AFP’s request for comment.

For months, Trump has complained that China controls the Panama Canal and that American vessels were overcharged for using it, even refusing to rule out a military invasion of Panama to “take back” the vital waterway.

Before the sale, CK Hutchison’s subsidiary in Panama had managed two of the five ports at the canal — one at Cristobal and the other at Balboa — via a government concession since 1997.

The ports transaction was “purely commercial… and wholly unrelated to recent political news”, co-managing director Frank Sixt said when the deal was announced.

China’s foreign ministry spokesperson Lin Jian declined to comment on the deal earlier this month.

The Hong Kong government has said it “never interfered in the commercial operation of Hong Kong companies”.

CK Hutchison Holdings is one of Hong Kong’s largest conglomerates, spanning finance, retail, infrastructure, telecoms and logistics.

Saturday, March 15, 2025

 

China Lashes Out at Hutchison’s Ports Deal with BlackRock-MSC Partnership

container terminal
Hutchison would sell its operations in 23 ports worldwide but much of the focus is on the terminals in Panama (CK Hutchison file photo)

Published Mar 14, 2025 12:13 PM by The Maritime Executive

 


After initially saying it would not comment on a “commercial deal,” the Chinese government used the media to lash out at the deal and criticize CK Hutchison. The proposed sale involves operations in 43 global ports outside China and the terminals at each side of the Panama Canal but is becoming embroiled in the larger political debate and the trade war between Trump and China as well as the government’s criticism of Hong Kong billionaire Li Ka-shing who controls CK Hutchison.

The government-owned newspaper Ta Kung Pao based in Hong Kong and seen as a mouthpiece for the Chinese Communist Party released a strongly worded editorial on Thursday, March 13, attacking the deal on patriotic terms. It cites the Trump administration's moves on tariffs and pending proposal for port fees on Chinese-built ships rolling it all into an American plot for domination. They warn the deal is part of a plot to deprive China of access to key shipping routes and global trade.

The New York Times highlights that the article says if the deal is completed, “the United States will definitely use it for political purposes and promote its own political agenda. China’s shipping and trade there will inevitably be subject to the United States.”

The reports cite that there has been a growing strain between Li Ka-shing and the Communist government which views him as supporting rival positions. The article calls CK Hutchison which said it would make $19 billion on the deal “profit-seeking,” and says it is “spineless groveling,” as well as a betrayal of the Chinese people. 

Saying that the deal goes against national interests, the editorial warns that the company “should think twice,” and “carefully,” about its position and where it stands. Official government sources quickly reposted the article which was seen as a further government endorsement of the positions.

Analysts said it was not surprising that China would speak out against the deal but it might just be bluster as it does not want to lose its position in major ports such as Felixstowe in the UK, Rotterdam, Europe, Australia, South America, and Asia. CK Hutchison however would retain its Chinese ports meaning China does not have to approve the deal.

The sale of the two terminals in Panama at Balboa and Cristobal was positioned as a parallel but separate transaction. The government of Panama has already said it would be reviewing the sale and now Bloomberg speculates that Panama might use China’s criticism to reject the sale. Trump hailed the BlackRock deal as a key component to regaining control of the Panama Canal but NBC News reported yesterday Trump has also asked for plans to place a U.S. military presence in Panama possibly to seize the canal.

The terms of the sale are for a partnership with BlackRock and MSC Mediterranean Shipping Company’s Terminal Investment Limited (TiL). MSC has taken a low profile in the media creating the impression that the deal is BlackRock’s. 

Hutchison has not responded to the criticism of the deal but the value of its stock plunged as investors feared the sale might not proceed. The company had set the beginning of April as a target for a final agreement.

Friday, March 07, 2025

Panama president says Trump ‘lying’ about reclaiming canal


By AFP
March 5, 2025


The Panama Canal handles five percent of global maritime trade, and 40 percent of US container traffic - Copyright AFP/File MARTIN BERNETTI

Panamanian President Jose Raul Mulino on Wednesday accused his US counterpart Donald Trump of “lying” about Washington taking back the Panama Canal.

“Once again, President Trump is lying. The Panama Canal is not in the process of recovery,” Mulino wrote on X.

“I reject, on behalf of Panama and all Panamanians, this new affront to the truth and to our dignity as a nation,” Mulino added, after Trump said that his administration had started to take back the vital waterway.

“To further enhance our national security, my administration will be reclaiming the Panama Canal, and we’ve already started doing it,” Trump said in a speech to Congress Tuesday. “We’re taking it back.”

Under mounting pressure from Washington, Hong Kong firm Hutchison said Tuesday it had agreed to sell its lucrative Panama Canal ports to a US-led consortium.

CK Hutchison Holdings said it would offload a 90-percent stake in the Panama Ports Company (PPC) and sell a slew of other non-Chinese ports to a group led by asset manager BlackRock.

The sellers will receive $19 billion in cash, the company said.

Hutchison subsidiary PPC has for decades run ports at Balboa and Cristobal on the Pacific and Atlantic ends of the interoceanic waterway.

But since taking office in January, Trump has complained that China controls the canal — a vital strategic asset that the United States once ran.

He has refused to rule out a military invasion of Panama to regain control, sparking angry protests and a complaint to the United Nations by the Central American nation.

Since 1999, the canal has been run by the Panama Canal Authority (ACP) — an autonomous entity whose board of directors is appointed by Panama’s president and National Assembly.

The 80-kilometer (50-mile) long canal handles five percent of global maritime trade, and 40 percent of US container traffic.

Beijing has consistently denied interfering in the canal.

Tuesday, March 04, 2025


BlackRock acquires Panama ports from Hong Kong firm amid Trump pressure

Panama City (AFP) – Hong Kong firm Hutchinson sold its Panama Canal ports to US company BlackRock after US President Donald Trump's refused to rule out a military invasion of Panama to retake control of its strategic canal, which Trump says China controls.



Issued on: 04/03/2025 - 
By:FRANCE 24   
US President Donald Trump has refused to rule out a military invasion of Panama to regain control of the canal © MARTIN BERNETTI / AFP


Under fierce pressure from US President Donald Trump, Hong Kong firm Hutchison said Tuesday it had agreed to sell its lucrative Panama Canal ports to a US-led consortium.

CK Hutchison Holdings said it would offload a 90-percent stake in the Panama Ports Company (PPC) and sell a slew of other non-Chinese ports to a group led by giant asset manager BlackRock.

The sellers will receive $19 billion in cash, the company said in a statement.

Hutchison subsidiary PPC has for decades run ports at Balboa and Cristobal on the Pacific and Atlantic ends of the interoceanic waterway.


But since taking office in January, Trump has complained that China controls the canal -- a vital strategic asset that the United States once ran.

Read moreThe Chinese interests behind Trump’s Panama Canal bluster

Trump refused to rule out a military invasion of Panama to regain control, sparking angry protests and a complaint to the United Nations by the Central American nation.

In a joint press release with the buyers, Hutchison said the deal was motivated by business, not politics.

"I would like to stress that the transaction is purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama Ports," co-managing director Frank Sixt said.

"This transaction is the result of a rapid, discrete but competitive process in which numerous bids and expressions of interest were received," said Sixt, who described the chosen agreement as "clearly in the best interests of shareholders."

BlackRock CEO Larry Fink said the transaction demonstrated his consortium's capacity to "deliver differentiated investments for clients."

"These world-class ports facilitate global growth," he added.

The Panamanian government, for its part, said the sale was "a global transaction, between private companies, driven by mutual interests."

It added that an audit launched into the PPC by the Panamanian comptroller's office that oversees public entities will continue in spite of the sale.
43 ports

The deal entails 43 ports comprising 199 berths in 23 countries.

CK Hutchison Holdings is one of Hong Kong's largest conglomerates, spanning finance, retail, infrastructure, telecoms and logistics.

It is owned by Hong Kong billionaire Li Ka-shing.

In February, Marco Rubio visited Panama on his first overseas trip as secretary of state, proof of the canal's importance to the new administration.

Rubio won a commitment from Panamanian President Jose Raul Mulino to exit the Belt and Road Initiative, China's signature infrastructure-building program.

He also pressed for free passage of US vessels through the Panama Canal, which was denied.

Since 1999, the canal has been run by the Panama Canal Authority (ACP) -- an autonomous entity whose board of directors is appointed by Panama's president and National Assembly.

The 80-kilometer (50-mile) long canal handles five percent of global maritime trade, and 40 percent of US container traffic.

Beijing has consistently denied interfering in the canal.

(AFP)

Ports sale offers Panama way out of Trump row: experts


By  AFP
March 4, 2025


Under fierce pressure from US President Donald Trump, Hong Kong firm Hutchison has agreed to sale two ports it operates at the entrance to the Panama Canal to a US-led consortium - Copyright AFP Pedro Pardo


Juan José Rodríguez

The decision by Hong Kong firm CK Hutchison to sell its Panama ports to a US-led consortium provides the Central American country with a convenient way out of its standoff with President Donald Trump, experts said Tuesday.

Trump has been fixated on the question of who controls shipping in the Panama Canal, which was built by Washington over a century ago to link the Pacific and Atlantic oceans and later handed over to Panama.

The Republican leader has repeatedly threatened the use of force to seize the canal, claiming that Hutchison’s ownership of two ports, one at either entrance to the canal, gave China control over the strategic waterway which links the Pacific and Atlantic oceans.

Panama rejected the claim that China had de facto control over the canal, which handles 40 percent of US container traffic, while taking various actions to appease Trump.

Its campaign to dodge his fury received a major boost on Tuesday with Hutchison’s announcement that it would offload its ports to a group led by giant US asset manager BlackRock.

The sale offers Panama “a way out of the diplomatic crisis without needing to cancel (Hutchison’s) concession, which would further damage the investment climate in Panama,” Benjamin Gedan, director of the Latin America program at the Washington based Wilson Center think tank told AFP.

Panama’s government insisted that it had no hand in Hutchison’s sale, insisting it was a deal “between private companies.”

Frank Sixt, co-managing director of CK Hutchison, also argued that the deal was “purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama Ports.”

But analysts said it came as a relief nonetheless for President Jose Raul Mulino, who had been under fierce pressure to reduce China’s footprint in the country, without riling the second-largest user of the canal after the United States.

In January, his government ordered an audit of Hutchison’s Panamanian subsidiary, Panama Ports, in what was seen as a shot across the bow at the group owned by businessman Li Ka-shing, one of Asia’s richest men.

In the end, one of Hong Kong’s largest conglomerates decided itself to bow to Trump’s pressure.

“In the Trump era, business is the new geopolitics,” Sabrina Bacal, a Panamanian political scientist, told AFP.

– ‘Taking back’ the canal –



In his inauguration speech on January 20, Trump declared the United States was “taking back” the Panama Canal, claiming China operated it.

On a visit to Panama two weeks later, US Secretary of State Marco Rubio issued Mulino with an ultimatum to immediately reduce Chinese influence on the canal or face unspecified “measures.”

Panama sought desperately to appease the Trump administration by first pulling out of China’s massive Belt and Road infrastructure program and then offering to act as a beachhead for Trump’s mass migrant deportations.

Panamanian authorities also began piling pressure on Hutchison, which handled 39 percent of the containers that passed through Panamanian docks in 2024, according to the Panamanian Maritime Authority.

The country’s Supreme Court agreed to consider two requests to annul the ports concession granted to Hutchison, which Panama’s attorney general claimed was unconstitutional.

The concession was first awarded in 1997 and extended for 25 years in 2021.

While Hutchison’s sale of the ports is expected to silence Trump’s criticism of Chinese involvement in the canal, he could however continue to complain that US vessels are being overcharged to use the waterway.

Last month, the US State Department claimed that Panama had agreed to let US naval vessels through for free — a claim denied by the Panama Canal Authority, the independent agency that runs the shipping route.

Monday, March 03, 2025

 

SLOCs and Chokepoints: Panama, Greenland, Canada – and Indigenous Peoples



Early into his second term as US President, Donald Trump threatened to seize control of the Panama Canal, Greenland, and Canada, possibly through military force. To justify seizing the Canal, Trump lamely asserted that the US has been subjected to “unfair” transit fees since control reverted to Panama, in 1999, under terms of the 1977 Torrijos-Carter Treaty.  Similarly unpersuasive, Trump argued that the US “needs” the natural resources (like oil, gas, uranium, copper, cobalt, nickel, and rare earth metals) of Canada, as well as those under Greenland’s melting ice sheet.

A common denominator in these three cases is how they all fall under the category of “Sea Control,” due to their important locations along “Sea Lines of Communication” (SLOCs) and “maritime chokepoints.”  Sea Control is one major facet of “Full Spectrum Dominance,” the paradigm of global military primacy operationalized by the George W Bush administration, during the so-called Global War on Terrorism (GWOT).

The paradigm originally derived from the notion of the “Unipolar Moment,” when the Soviet Union collapsed, in 1991, and left the US as the “world’s sole superpower” – presumably forever after.  One of the ancillary principles of Full Spectrum Dominance was articulated as the “Wolfowitz Doctrine,” which argued for preventing the emergence of “peer” or “near-peer” rivals – also forever.  Another key ancillary was the policy of “strategic denial,” sometimes called “anti-access/ area denial” (A2/AD).

Nothing is very new about the general idea of controlling sea lanes and chokepoints.  These have been relevant in naval strategies for centuries, all around the world.  (A sampling of current literature titles would include: “Lawful Sea Control to Protect Sea Lines of Communication and Chokepoints” and “Southeast Asian Chokepoints: Keeping Sea Lines of Communication Open” and “Maritime Chokepoints: Key Sea Lines of Communication (SLOCs) and Strategy” and “Choke Points“).  What’s new is how Full Spectrum Dominance applies to today’s evolving situation in the SLOCs and chokepoints of and around Panama, Greenland, Canada, and elsewhere.

Whoever controls a chokepoint has the obvious advantage of keeping it open to merchant transit, ideally under “freedom of navigation” rules and norms, such as are enumerated in the United Nations Convention on the Law of the Sea (UNCLOS) – which the US has not ratified.  On the other side of the coin, the very definition of chokepoints implies that they can be closed off and blockaded by force – presumably given some alleged military necessity, legal or otherwise.

Panama

This map illustrates global Sea Lines of Communication (SLOCs) and Maritime Chokepoints.  The significance of the Panama Canal is clear to see, as it is the singular chokepoint of the Western Hemisphere, between the Atlantic and Pacific oceans.  This importance has remained the same since it opened, in 1914, but direct military US control of the Canal and the entire “Canal Zone” ended and was transferred to Panama, in 1999.

The importance of the chokepoint is somewhat complicated.  In this next map, it is clear that the Canal is only the primary chokepoint among several others in the Caribbean.  In order to transit the Canal, in either direction, a ship must also transit secondary passages, the most important of which is the Windward Passage, between Haiti and Cuba (near Guantanamo – GITMO).  Other significant secondary chokepoints would be the Mona Passage (between Puerto Rico and the Dominican Republic), the Yucatan Channel (between Cuba and Mexico), the Florida Straits (between Cuba and Florida), and the passage between Grenada and Trinidad-Tobago, through which maritime traffic extends up and down the east coast of South America, to and from ports including Rio, Belem, and Buenos Aires.

Apart from all that GITMO has come to represent as a hell-hole, in the context of the GWOT, it is important to recognize it as a major naval base at a very strategic chokepoint.  The base was originally leased from a newly-independent Cuban government, following the Spanish American War of 1898.  That lease was declared “perpetual,” and it carried over into the era since the Cuban Revolution of 1959, when it became maintained by force against a hostile state host.

US military force has conditioned political affairs in Central and South America and the Caribbean since the days of the Monroe Doctrine, in 1823.  Since the Panama Canal first opened, in 1914, armed force has always been at the intersection between regional events on the land and those on the water.  The Canal indirectly explains Ronald Reagan’s illegal military intervention of Grenada, in 1983, when a Socialist politician was elected to govern a tiny island – which just happens to sit astride a major Caribbean SLOC and chokepoint.  It also indirectly explains Bill Clinton’s policy of preventing Socialism in Haiti, on the other side of the Windward Passage from Socialist Cuba, during the 1990s.  And of course, it explains George HW Bush’s intervention in Panama, in 1989, in so-called “Operation Just Cause” (mocked by critics as “Operation Just Because”).

The pretext of that intervention was to arrest Panamanian President Manuel Noriega, who had been an asset of the DEA and the CIA, and who cooperated in training soldiers for the Contra War against the Socialist Sandinistas in Nicaragua, during the 1980s.  He stepped out of line and outlived his usefulness, when he agreed to join Panama to the “Contadora” group of Central American and European nations, who demanded a regional solution to the Contra War and the ongoing bloodbaths in Guatemala, El Salvador, and elsewhere.  That demand implied sympathy for Socialism, and so Noriega had to go.  He was arrested for drug trafficking, tried, convicted, and sentenced to 40 years in a US prison.  Hundreds of Panamanians were murdered in the intervention.

At that point, in 1989, the US military was vacating some 45 bases in the Canal Zone. These were largely relocated into the near distance.  There are no US naval or air bases at present in Panama, but there are nine in Honduras, seven in Guatemala, five in El Salvador, four in Costa Rica, seven in Colombia, and seven in Nicaragua, and elsewhere in the Caribbean (see the map).

In 1989, the Socialist world was falling apart, with the Soviet withdrawal from Afghanistan, the collapse of Yugoslavia and the Warsaw Pact countries, rebellion and repression in China, electoral defeat of the Sandinistas, and then, the Soviet Union up and died.  In Panama, up to that point, the presumption was that any threat to the Canal was coming from the Soviet adversary.

Then, a steady stream of hysterical alarm that “Communist China” would take control of the Canal, or already had control, took over.  This hysteria had been constant, ever since the Torrijos-Carter Treaty of 1977 was signed, but around 1990, it went ballistic.  They’ve been crying wolf for 36 years now.

Trump’s current obsession over China and the Canal is based partly on account of the port facilities a Hong Kong-based corporation, CK Hutchison, now owns on both ends of the passage, and other Chinese infrastructure projects.  The alarm is also based partly on the deep economic relations China has developed with Panama and other Central and South American countries.  American economic primacy has a peer or near-peer rival, and that’s a problem, as per the Wolfowitz Doctrine, even though it’s not military – at this point.  China’s Belt-and-Road Initiative and the BRICS organization are colliding head-on with Full Spectrum Dominance, and one major flash point is in Panama.

Both Trump and his new Secretary of State, Marco Rubio, have alleged without evidence that China might block the Panama chokepoint.  This is pure imperialist propaganda, hyperbole, and total hypocrisy.  The truth is that only the US presently has the capabilities to do such a thing, despite the physical relocation of its military bases from the Canal Zone since 1999.

China has no significant power projection capabilities anywhere in the Western Hemisphere.  Any Chinese attempt to block or blockade the Panama chokepoint would require military force, and the presumption would have to be that all the pre-positioned US firepower, including the 4th Fleet of the Navy, would sit still and concede control of all the chokepoints of the Caribbean, as well as allow enemy forces anywhere near the Canal.

The bottom line is not that China is a serious threat to American “national security” in Panama.  Instead, Trump’s policy is to reassert direct US military control, with its implicit threat to blockade the Canal against anybody, with or without a credible pretext.  Gunboat diplomacy has defined US policy in Panama since the beginning.  “Hard power” is what Trump believes makes America “great.”  Bring the hammer.

Greenland, Denmark, and Canada

Few of the current maps of SLOCs and chokepoints demonstrate how Sea Control applies to Greenland and Canada, which have become subjects of the current crisis being created by Donald Trump, in his stated intent to seize control of both countries.

Climate change and global warming have brought the situation into the spotlight, as melting Arctic ice has resulted in opening the Northwest Passage, along the Canadian and Alaskan Arctic coastlines.  There is little in the way of military presence throughout that SLOC and down the west coast of Greenland, except for the US Pituffik Space Base, which is located strategically on the Nares Strait chokepoint, at the northern end of Baffin Bay.  Pituffik SB was formerly known as the Thule Air Base, a US Cold War installation where ICBMs were deployed under the glaciers.

On the Russian side of the Arctic coastline, along the also-melting Northern Sea Route, there has been some intensive exploration for petroleum and mineral resources.  Russia has claimed ownership of much of the Arctic Ocean basin, including the North Pole.  Meanwhile, China is increasingly interested in opening the Transpolar Sea Route, for more economical transportation in its burgeoning Belt-and-Road Initiative trading system.  The Arctic route between China and Europe is far shorter than the alternative through the Suez and Panama Canals.

During the Cold War, Greenland’s importance in NATO’s defense architecture was determined by its strategic location, as the western coastline of the so-called GIUK Gap (between Greenland, Iceland, and the UK), shown in the map here.  Soviet submarines and surface warships of the Northern Fleet had to transit to and from their bases around Murmansk and the Kola Peninsula through the chokepoint, in order to sail into and out of the Atlantic Ocean.

The GIUK Gap strategy is probably still operational, but Greenland’s location along the Northwest Passage amplifies its importance, as Russian and Chinese vessels already pass along its coastlines, where new chokepoints have yet to be established, especially on the western and southern shores.  Both China and Russia are looking for opportunity to build harbors, ports, and naval bases all around Greenland’s littoral.  The US wants to build bases, too.  Perhaps, so does Denmark.

Adversarial competition explains some of Trump’s urgency to seize control – and to deny that control to Canada, Greenland, and Denmark, as well as to Russia and China.  “Strategic denial” applies not only to military transit, but also to the many petroleum and mining companies competing for leases that might be negotiated with the present sovereign state of Denmark, or perhaps more importantly, with any new indigenous Greenlandic government, if it should become independent from Denmark.

In this map, Arctic military bases are located, illustrating the situation.  Obviously, Full Spectrum Dominance of the Arctic is going to require a big upgrade, construction of numerous military bases, just to balance present Russian deployments.  And such development would depend on the cooperation of Greenland, Denmark, and Canada, which might not be forthcoming.  It would be easier for the US if it just owned all that territory, and cooperation with other parties would not be necessary.

None of this is to deny the importance of both Greenland and Canada as present and future resource colonies.  There is some huge potential for oil and gas drilling, as well as mineral extraction, in both cases.  Just whose corporations would be eligible for permitting and licensing that kind of development is an open question.  Competition is already fierce, and it includes Russian and Chinese companies, as well as American, Canadian and Danish concerns.  They all have stars in their eyes, and are salivating over the riches that they might colonize and monopolize – and deny to other parties.

The complications and consequences of colonial capitalist industrial development, while laying waste to Arctic environments and ecosystems with pollution and contamination, as the ice melts and sea levels rise, still don’t rise quite to the level of conflict over SLOCs and chokepoints.  Can industrialization happen without a solid foundation of political control of the territory, backed up with military force?  For the US, Full Spectrum Dominance is the whole story.  As in the Wolfowitz Doctrine:  No peer rivals!  To allow easy access to Russia and/or China is simply out of the question, unless the US has a total, global lock on Sea Control.  That’s the sub-text of Trump’s message.

The Indigenous Dimension

In the 1970s, the international movement for rights of indigenous peoples began to coalesce in the United Nations, and it led to the promulgation of the UN Declaration on the Rights of Indigenous Peoples (UNDRIP), in 1993.  Throughout that development, indigenous peoples of the Arctic were instrumental actors, and their activism generated organizations that today have two main levels.  The top level can be identified as the Arctic Council, which includes the governments of Denmark, Norway, Sweden, Finland, Iceland, Canada, Russia, and the USA.  It is a state-centric organization, founded in 1996, and it also includes 13 other states as Observers.

The Arctic Council was created in great part to contain the political pressures of indigenous peoples demanding recognition through the UNDRIP movement. The Council relegated them to a non-voting second level of “Indigenous Permanent Participants,” comprised of six regional indigenous organizations, one of which is the Inuit Circumpolar Council (ICC), which represents Inuits of Greenland (and therefore Denmark, today), Canada, Alaska, and Russia.  The other Permanent Participants are:  the Aleut International Association, the Arctic Athabaskan Council, the Gwich’in Council International, the Saami Council, and the Russian Association of Indigenous Peoples of the North (RAIPON: representing Aleuts, Chukchis, Nenets, Yupiks, Evenks, Sahkas, and over a dozen other Arctic peoples).

In early indigenous organizing within the UN, Greenland Home Rule was considered a good example of positive relationships possible between states (in this case, Denmark) and indigenous peoples.  But for many Greenlanders (80-90 percent of whom are Inuit), Home Rule never came close enough to decolonization, and they advocated for total independence.  Their movement has now grown to a point where that goal might be realized – just as Donald Trump comes along and tries to buy the entire island.  It’s not the least bit clear with whom Trump would make one of his infamous real-estate deals.  Trump asked: “Who owns Greenland, anyway?”  We may be about to find out.

An independent Greenland would face a host of problems, getting started.  Probably the worst case scenario would to be bought out and owned by the United States, and rendered into an analog of an Indian reservation, or a captured nation, like Hawaii, Puerto Rico, or Guam – consigned to the Interior Department and subordinated to the Bureau of Land Management.  Another big problem would be to organize a military capability to control and defend its own SLOCs and chokepoints.

In an alternative scenario, the Inuit people of Greenland might find the greatest support in their current alliances with other Arctic indigenous peoples.  After all, it really has been a collective effort, within the UN and the Arctic Council, that brings Greenland’s aspirations for independence to the table.

This is especially true for the Inuits who inhabit the Nunavut Territory of Canada, just across the Nares Strait and Baffin Bay.  In the vast area of Nunavut, as in Greenland, Inuits comprise some 80-90 percent of the population.  Nunavut’s Arctic coastline is also Canada’s.   The entire littoral defines the SLOC that is the Northwest Passage, along which there are numerous possible chokepoints, control of which Donald Trump defines as a question of “national security,” not just for the US, but for the entire “Free World.”

Whether the Nunavut Inuits generate a united political force-field to defend and protect themselves is yet to be seen.  Likewise, the question is whether this population finds support and unity among other Arctic peoples, especially among Inuit relatives in Greenland, who are facing the same threat of being taken captive by the United States, in its quest for Full Spectrum Dominance.

Marc Sills, Ph.D. is an independent writer living in New Mexico.

Thursday, February 27, 2025

Panama AG agrees Hong Kong firm’s canal concession is ‘unconstitutional’

THE TRUMP EFFECT


By AFP
February 26, 2025

The Panama Ports Company, a subsidiary of CK Hutchison, manages two of the canal's five ports - Copyright AFP/File Martin BERNETTI

Panama’s attorney general said Wednesday that concession granted to a Hong Kong-based firm to operate ports on either end of the Panama Canal should be scrapped for being “unconstitutional.”

The contract held by CK Hutchison Holdings, owned by Hong Kong billionaire Li Ka-shing, has been at the root of US President Donald Trump’s concerns for Chinese influence over the waterway.

The Panama Ports Company, a subsidiary of CK Hutchison, manages two of the canal’s five ports, an arrangement in place since 1997 via a concession from the Panama government.

Last week, Panama’s Supreme Court agreed to consider a request filed by a lawyer to nullify the contract — the second such challenge before it.

On Wednesday, Attorney General Luis Carlos Gomez filed a submission in support of the suits and asking the court to find the contract “unconstitutional” for “improperly agreeing to transfer exclusive rights of the Panamanian State.”


Panama Ports Company manages the ports of Cristobal on the canal’s Atlantic side and Balboa on the Pacific side.

The arrangement was renewed in 2021 for 25 years.


The plaintiffs in the case argue that the company benefited from undue tax breaks and other benefits.

The legal challenge came after Trump threatened to take back the canal — built by the United States and handed over to Panama in 1999 — claiming China was effectively “operating” the vital waterway.

Following Trump’s charges, Panama also announced it would audit the Panama Ports Company.

CK Hutchison Holdings is one of Hong Kong’s largest conglomerates, spanning finance, retail, infrastructure, telecoms and logistics.

Friday, February 07, 2025

‘Intolerable’ US claim sparks new row over Panama Canal


By AFP
February 6, 2025


Panama's Jose Raul Mulino has called US claims to have obtained free passage for government vessels through the Panama Canal an "absolute falsehood" - Copyright PANAMA'S PRESIDENCY PRESS OFFICE/AFP Handout


Juan José Rodríguez, María Isabel Sánchez

Panama on Thursday rejected the United States’ claim of securing free passage for its government vessels through the Panama Canal, while bowing to US pressure to quit a key Chinese project.

Panamanian President Jose Raul Mulino told reporters the US assertion about the waterway was “simply and plainly intolerable,” adding that he rejected “bilateral relations based on lies and falsehoods.”

Since winning the US election in November, President Donald Trump has refused to rule out the use of force to seize the canal built by Washington over a century ago and later handed over to Panama.

Around 40 percent of US container traffic passes through the narrow body of water linking the Caribbean Sea with the Pacific Ocean.

The new row between Panama and Washington erupted after the US State Department claimed that Panama had agreed to let US government vessels through the canal for free after talks last weekend between Mulino and US Secretary of State Marco Rubio.

In a post on the social media platform X, the State Department claimed the decision would save the US government “millions of dollars a year.”

The Panama Canal Authority (PCA), an independent body that runs the waterway, quickly rejected the claim, saying it had “not made any adjustments” to its tariffs.

The authority added however that it was open to dialogue on the matter.



– ‘Not breaking the US’ –




US government vessels — primarily from the navy — make up a small portion of the ships that pass through the canal.

Trump has loudly complained that US vessels are being overcharged to use the shipping route.

Mulino said that US government vessels, including navy vessels, paid “$6-7 million a year” for the right of passage.

“It’s not as if the canal toll is breaking the economy of the United States,” he remarked.

Beyond the tolls, Washington has appeared chiefly concerned about Chinese investment in the 80-kilometer-long canal, which handles 5 percent of global maritime trade.

CK Hutchison Holdings — owned by Hong Kong billionaire Li Ka-shing — has a concession to manage two of the canal’s five ports.

Trump, who is scheduled to hold telephone talks on Friday with Mulino, has claimed that Beijing could close the canal to the United States in a crisis — a claim Panama strenuously denies.

But in a key concession to Washington, Mulino on Thursday confirmed that Panama had pulled out of China’s massive Belt and Road Initiative (BRI) infrastructure program.



– Chinese project torpedoed –




Mulino said that the Panamanian Embassy in Beijing had given China the required 90-day notice of its decision not to renew its involvement in the program, which it joined in 2017.

Panama is the first Latin American country to announce its withdrawal from President Xi Jinping’s signature, trillion-dollar program, which operates in over 100 countries.

On Wednesday, China’s Foreign Affairs spokesman, Lin Jian, had argued that the partnership was yielding “fruitful results” and urged Panama to “resist external interferences.”

The latest controversy over the Panama Canal comes at the end of Rubio’s week-long visit to Central America, his first as the US top diplomat.

He had threatened action against Panama unless it made immediate changes to reduce Chinese influence on the canal but later appeared more conciliatory, hailing Mulino’s pledge to quit China’s infrastructure program as a “great step forward” for bilateral relations.

Following Trump’s canal takeover threat, Mulino last month ordered an audit of Hutchison Holdings.

“If they violate the terms of the concession or cause imminent economic harm to the country, we will act accordingly, but for now the audit is ongoing,” he said Thursday.


Tuesday, February 04, 2025



Panama lawsuit requests axing Hong Kong firm's canal concession

Agence France-Presse
February 4, 2025 

A subsidiary of CK Hutchison Holdings manages two of the canal's five ports (MARTIN BERNETTI/AFP)

Two Panamanian lawyers filed a complaint Monday to cancel the concession of a Hong Kong-based company for operating two ports on the Panama Canal, following U.S. President Donald Trump's threats to seize the vital waterway.

A subsidiary of CK Hutchison Holdings -- owned by Hong Kong billionaire Li Ka-shing -- manages two of the canal's five ports, an arrangement in place since 1997 via a concession from the Panama government.

But Norman Castro, one of the lawyers in the case brought before the Supreme Court, told reporters the contract "violates what the constitution says in about 10 articles."

"After a detailed analysis of the contract... we decided that an action for unconstitutionality was the appropriate means" to challenge the concession, said Julio Macias, another lawyer behind the suit.

The complaint also accuses the Hong Kong subsidiary of not paying taxes and benefits due to a series of advantages that are allegedly against the law.

Panama Ports Company -- a CK Hutchison Holdings subsidiary -- currently manages the ports of Cristobal on the canal's Atlantic side and Balboa on the Pacific side.

That arrangement was automatically renewed in 2021 for another 25 years.

The case comes after Trump threatened to take back the canal -- built by the United States and handed to Panama in 1999 -- as he said China was effectively "operating" it.

But temperatures have lowered since Secretary of State Marco Rubio's recent visit to the Central American country, with Panama President Jose Raul Mulino announcing they will not renew participation in China's Belt and Road Initiative.

Following Trump's charges, Panama also announced an audit into the company.

CK Hutchison Holdings is one of Hong Kong's largest conglomerates, spanning finance, retail, infrastructure, telecoms and logistics.

© Agence France-Presse

Monday, February 03, 2025

CK Hutchison: the Hong Kong firm behind Panama port operators


By AFP
February 3, 2025


A ship is loaded with containers at Balboa, operated by Hutchison Ports, in Panama City - Copyright AFP/File Luis ACOSTA
Holmes CHAN

A sprawling business empire built by Hong Kong billionaire Li Ka-shing is caught in the crossfire as the extent of Chinese influence over the Panama Canal is debated.

US Secretary of State Marco Rubio said last week it was “unacceptable” for Hong Kong-based companies to control the canal’s entry and exit points, arguing they could shut down transit if Beijing ordered them to.

Panama has now announced an audit into the subsidiary of Li’s CK Hutchison Holdings, which manages two of the canal’s five ports.

Here’s what you need to know about the Panama port operator and its ties to China:

– Who runs the ports? –

Hutchison Ports PPC — which also uses the name Panama Ports Company SA — has managed the port of Cristobal on the canal’s Atlantic side and Balboa on the Pacific side since 1997 via a concession from the Panama government.

That arrangement was automatically renewed in 2021.

Hutchison Ports said last month that it is the “only port operator in the country where the state is a shareholder”, and that it had paid the Panama government $59 million in the past three years.

It said its workforce is almost entirely Panamanian.

Parent company CK Hutchison Holdings is one of Hong Kong’s largest conglomerates, spanning finance, retail, infrastructure, telecoms and logistics.

The company has a hand in running 53 ports in 24 nations, including in Britain, Spain and Australia.

– Hong Kong’s ‘Superman’ –

CK Hutchison was built from nothing by Li — now Hong Kong’s richest man, nicknamed “Superman” for his business acumen.

His company Cheung Kong — named after China’s Yangtze River — thrived in Hong Kong’s property market during the British colonial era and began expanding overseas in the 1980s.

In 2015, CK Hutchison was born out of a restructuring.

Three years later, Li stepped down as company chairman at age 89 and handed control to his eldest son Victor.

The firm and its subsidiaries operate a range of businesses, including ports, in mainland China.

Li was known to have close ties with top Chinese leaders before Xi Jinping came to power.

Victor Li is a long-time member of the Chinese People’s Political Consultative Conference, a top political advisory body.

– Exposure to China –

Rubio says the current arrangement is not in the national interests of the United States.

If Beijing ordered a shutdown of the canal, a Hong Kong firm would have no choice but to comply as “a company based in Hong Kong is the government of China”, Rubio said last week, without specifying CK Hutchison by name.

A former British colony, Hong Kong was handed over to China in 1997 under a “One Country, Two Systems” framework which promised a high degree of autonomy and a separate legal and financial system.

But Beijing has remoulded Hong Kong in its authoritarian image after the city saw huge and sometimes violent pro-democracy protests in 2019.

Critics say the city’s two subsequently imposed national security laws curtail rights and undermine the free and open business environment that made Hong Kong an international finance hub.

In 2020, Israel rejected an infrastructure bid from CK Hutchison after then US secretary of state Mike Pompeo warned about Chinese involvement.

– ‘Never interfered’ –

A Hong Kong government spokesperson told AFP that the city’s authorities have “never interfered in the commercial operation of Hong Kong companies”.

The financial hub has been a “staunch supporter of the multilateral trading system and opposes any country imposing measures or restrictions that undermine normal trade or business operations”, the spokesperson said.

CK Hutchison did not respond to questions about canal operations. Last month the company directed AFP to a statement by its Panama subsidiary.