China has criticized the proposal to sell Panama Canal ports to BlackRock, labeling it as a betrayal of Chinese interests. A commentary in the state-owned Ta Kung Pao newspaper, reposted on China’s Hong Kong and Macao Affairs Office website, caused shares in CK Hutchison (CKH), the owner of the ports, to drop by over 6%. Observers suggest that if Beijing objects, the deal might not go through.
Dan Baker from Morningstar stated that no approval from Chinese regulators is needed since CKH retains its Chinese ports, but other influences could risk the deal. Last week, BlackRock-led investors announced a $22.8 billion deal to acquire Balboa and Cristobal ports and CK Hutchison’s controlling interest in 43 other ports globally. The deal is described as an agreement in principle.
US President Trump has previously expressed intentions to regain control of the Panama Canal, citing Chinese ownership of some port operations as evidence of Chinese control over the canal. The sale was seen as a way for CK Hutchison to divest a politically sensitive asset at a good price. However, the harsh commentary from a newspaper aligned with the ruling Communist Party could disrupt the deal, accusing CK Hutchison of disregarding national interests and betraying the Chinese people. The Panama Canal, constructed by the US in 1914, is crucial for international trade and US military vessels, with about 4% of global maritime trade passing through it.
— news from CNN
