China blasts ‘spineless' plan to sell Panama Canal ports to BlackRock

CNN

14-03-2025

China has sharply criticized a proposal to sell ports in the Panama Canal to American asset management giant BlackRock, attacking the deal as 'spineless groveling' and a 'betrayal' of the Chinese people.
A commentary published by the state-owned Ta Kung Pao newspaper and reposted on the website of China's Hong Kong and Macao Affairs Office on Thursday sent shares in CK Hutchison (CKH), the Hong Kong-based owner of the ports, plummeting by more than 6% on Friday.
Observers say it was a sign that some investors are concerned the deal may not ultimately go through, if Beijing objects.
'I'm not aware that any approval from Chinese regulators is required given CKH is retaining all of its existing Chinese ports,' Dan Baker, a senior equity analyst for Morningstar, told CNN. 'Of course, there is some chance that other influences may be brought to bear on the company that might put the deal at risk. The market seems to be pricing in some chance of this.'
CNN has reached out to the conglomerate for comment.
Last week, a group of investors led by BlackRock said it would spend $22.8 billion to buy the ports of Balboa and Cristobal on either end of the canal from CK Hutchison. The consortium also agreed to buy CK Hutchison's controlling interest in 43 other ports comprising 199 berths in 23 countries. They said the deal is an 'agreement in principle.'
US President Donald Trump said during the lead-up to his inauguration and since taking office that he intended to 'take back' the Panama Canal from Panama, which took over control of the crucial international waterway in 1999 under a treaty negotiated with the United States 20 years earlier. He cited Chinese ownership of some of the port operations as a sign that China was now running the canal.
When announced last week, the deal was seen as an expedient way for CK Hutchison — a global conglomerate backed by Li Ka-shing, long famed for being one of Hong Kong's savviest investors — to get rid of a political hot potato while fetching a good price from BlackRock and company.
The group said in a filing to the Hong Kong stock exchange that it expected to receive cash proceeds of more than $19 billion from the sale, an amount well above what analysts estimated the ports were worth.
But Thursday's scathing commentary from a newspaper closely aligned with the ruling Communist Party could throw a spanner in the works. It called out CK Hutchison, accusing it of 'spineless groveling,' 'profit-seeking' and 'disregarding national interests and national justice, and betraying and selling out all Chinese people.'
'Faced with such a major event and a matter of great justice, the relevant company should think twice … and think carefully about what position and side it should stand on,' it added.
The Panama Canal was constructed by the US in the early years of the 20th century and completed in 1914. For most of that century, it was operated by the US, before the Carter Administration negotiated its handover to Panama in a controversial treaty opposed by many Republicans at the time.
The 51-mile canal is key to both the movement of international trade and US military vessels. About 4% of the world's maritime trade and more than 40% of US container traffic traverses the canal.
Since its handover in 1999, the canal itself has been operated by Panama, not the Chinese, despite Trump's stated concerns.