China has criticized the agreement between Hong Kong-based company CK Hutchison and the American firm BlackRock regarding the sale of the Balboa and Cristobal ports at both ends of the Panama Canal, alleging that Washington’s involvement constitutes coercion. The battle for the Panama Canal ports has intensified as the U.S. and China engage in a dispute over these critical assets in the context of CK Hutchison’s agreement to sell them to BlackRock. This development aligns with President Donald Trump’s ambitions to take control of the crucial maritime passage.
At the beginning of March, CK Hutchison announced that it had agreed with a North American investment firm to sell the Balboa and Cristobal ports at both ends of the Panama Canal and 41 other ports in 23 countries. The deal, which has yet to be signed, is valued at $23 billion. However, after its announcement, Chinese authorities criticized the port sale, accusing Washington of intimidating the Hong Kong-based firm, as the South China Morning Post reported. The battle for the Panama Canal ports is unfolding in an environment of rising geopolitical tensions, with Beijing perceiving the deal as a strategic maneuver by Washington to curtail its global trade influence.
The agreement is currently at the “agreement-in-principle” stage, allowing 145 days to finalize the purchase terms. During this time, CK Hutchison’s shareholders and the Panamanian government must approve the transaction.
What Changes Will the Agreement Bring?
According to China Daily, Hutchison Port Group is one of the world’s largest port companies, owning 43 container ports with 199 berths in 23 countries, including two Panamanian ports in which it holds a 90% stake. In this context, the sale of an 80% stake in Hutchison Port Group could give BlackRock control over 10.4% of global container traffic, making it the third-largest port operator in the world.
Such an agreement would significantly impact logistics costs and supply chains for China, which remains the largest trading partner for more than 120 countries. Passage through the Panama Canal could become more difficult for Chinese ships if ports on both sides were to come under the control of an American company. The battle for the Panama Canal ports reflects broader economic and political struggles, as China views this potential shift in power as a direct threat to its trade routes and global supply chain stability.
Additionally, the deal would strengthen Trump’s “America First” strategy and allow Washington to exert more significant influence in the Asia-Pacific region, according to Andrew KP Leung, an international strategist and former Hong Kong official. The acquisition of such an extensive port portfolio could also help the U.S. compete with China in container shipping and global trade, particularly when combined with the imposition of new tariffs.
How Can China Undermine the Agreement?
Beijing has time to prevent the deal if the final contract remains unsigned. Experts believe that since the agreement does not involve ports in China, its authorities cannot directly regulate its implementation.
Regina Ip Lau Suk-Yee, chairwoman of Hong Kong’s Executive Council—a key decision-making body—stated that it would be difficult for mainland and local authorities to intervene in the deal. She noted that it is an “excellent deal” for the company, adding, “If CK Hutchison is to be blamed for anything, it is for not considering national interests and the national reaction before closing the deal.” She further argued that the authorities should protect the company from U.S. pressure.
Nevertheless, Beijing has several tools at its disposal to derail the pact. According to Reuters, it could invoke antitrust laws and interfere in the transaction if it deems the deal would eliminate or restrict competition in the Chinese domestic market. The battle for the Panama Canal ports is thus likely to extend beyond diplomatic criticism to legal and regulatory measures that China could use to block or complicate the sale.
Another tool is the Foreign Investment Security Review Measures, adopted in 2021, which enables the examination of a deal to determine whether it poses a national security risk. Under this law, Chinese authorities “may have the authority to review transactions between foreign companies if the subject of the transaction is an entity related to China.” Felix Ng, a partner at the law firm Haldanes, noted that this is particularly relevant in the case of CK Hutchison, which has facilities and representative offices in China.
The 2020 National Security Law could also scrutinize the agreement, which penalizes collusion with foreign forces and subversion against the Chinese government. Simon Young, a professor at the University of Hong Kong’s Faculty of Law, noted that for this law to be applied, authorities must demonstrate that the port agreement endangers national security, violates Chinese laws or policies, and would have severe consequences. The deal could be annulled if violations are discovered, and the government could seize the company’s assets.
Pressure from the U.S.
Additionally, Beijing could attempt to nullify the agreement by demonstrating that CK Hutchison was pressured into finalizing it. According to Dominic Wai Siu-Chung, a lawyer specializing in commercial litigation, the coercion argument could also be used by the party that signs the agreement itself. The battle for the Panama Canal ports highlights the escalating tensions between Washington and Beijing, as each side employs economic, legal, and diplomatic strategies to gain control over one of the world’s most vital shipping lanes.
The possibility of using this tool to influence the deal is also reflected in the words of Chinese Foreign Ministry spokesperson Mao Ning, who stated that Beijing firmly opposes “economic coercion, hegemonism, and intimidation,” referring to the Trump Administration’s pressure on the Hong Kong-based company. Reports indicate that China has already launched an investigation into the port sale.www.youtube.com/watch?v=JWdrCmuAYL0