Latest news with #LiKa-shing
Mint
3 days ago
- Business
- Mint
How China built a global port network
Chinese shipping giant Cosco has majority ownership of Spain's Port of Valencia. When a Hong Kong conglomerate set plans this year to sell its global network of shipping ports to an American-led investment group, two facilities in Panama got most of the attention. But the real action is in Europe, where Chinese business interests have spent decades accumulating port holdings. Hong Kong-based CK Hutchison agreed in March to sell more than 40 ports in 23 nations to an investor group led by American financial firm BlackRock, and the parties had aimed to reach a definitive agreement on the $23 billion deal at month-end. Now, Beijing is trying to muscle into the deal and carve out a stake for its giant shipping group Cosco, The Wall Street Journal reported Thursday. Politics have hung over Hutchison's container-handling facilities at either end of the Panama Canal since it first began operating them in the 1990s. The sales plan came together after President Trump's vow to bring the canal under U.S. control. The most substantial impact on China's ambitions from the port deal might be in Europe, a continent crucial to Beijing's trade and diplomatic ambitions. Nearly half of the facilities on the block are in Europe or North Africa. Trump's trade tariffs, meanwhile, have Europe bracing for a deluge of Chinese goods that have been rerouted away from the U.S. Shipping volumes of items including electric vehicles are already up in places such as Spain. If the Hutchison deal goes through, the American-led investors would gain significant market share in a continent where the Chinese presence has grown large in recent years. Under the announced plan, BlackRock's Global Infrastructure Partners unit is buying the Hutchison ports with an investment partner, Italy's Aponte family, which runs giant MSC Mediterranean Shipping Company and its Terminal Investment Ltd. unit. Whether the deal goes through as planned or with Cosco's participation, China's port foothold in Europe would be concentrated under government-run companies similar to Cosco, which U.S. authorities consider a military-aligned enterprise. Exiting the region would be Hutchison, a private company controlled by the family of the 96-year-old Hong Kong billionaire capitalist Li Ka-shing, who hasn't always seen eye-to-eye with Beijing. China accelerated port investments after outlining the Belt and Road Initiative to modernize land and sea trade routes and reprise the Silk Road, which for centuries linked China with Europe through cities such as Valencia, Spain. The change in control of a port can alter trade routes and indicate economic power, not least of all because fewer than 10 shipping groups including Cosco, Swiss-based MSC, France's CMA CGM Group and Denmark's A.P. Moller-Maersk move nearly all of the world's containers. Ports with Chinese investment now dot the globe, according to a database produced by Zongyuan Zoe Liu at the Council on Foreign Relations in New York. Spain illustrates how Chinese business interests expanded port holdings in Europe, and what happens now. The southern European country was booming in 2006, when the government awarded Hutchison a contract to build and operate a new container terminal for the Port of Barcelona. Hutchison—which traces its origins to Hong Kong's own docks from the first days of 19th-century British colonialism—began investing in European ports in the 1990s. Its European holdings span the U.K., the Netherlands, Sweden, Belgium, Germany and Poland, plus Spain. The British managing director of Hutchison ports, John Meredith, called Barcelona 'our key port in southern Europe." The story was different with Spain's Port of Valencia in 2017, when a Chinese group took control. Cosco got 51% as a result of a Spanish debt crisis and U.S. private-equity investors looking for a profit. China's port expansion strategy in Europe has primarily featured opportunistic acquisitions—a possible reason the Hutchison sale looks inviting to Cosco. 'The European ports are the best in terms of asset and infrastructure, of international importance for trade," said Liu of the Council on Foreign Relations, making them appealing investments. Government-run China Merchants took one of the boldest steps in 2013, buying 49% of a port business called Terminal Link from CMA CGM for 400 million euros. The deal gave China Merchants a minority share in a range of facilities, especially in Europe, and slivers in Miami and Houston. In developing countries throughout Africa and Asia, and more recently in South American nations such as Peru and Brazil, China's government-run companies have established wholly new shipping ports. Some of the construction deals have saddled host countries with large amounts of debt and were designed as gateways to haul away mineral commodities. Liu said China has adopted a build-it-and-they-will-come strategy in many developing nations based on its domestic infrastructure model of integrating new ports into new networks of expressways and railroads. Cosco first entered Europe as a ports investor in bought a concession to run operations in Piraeus, Greece, and turned it into a world-class facility. Cosco itself first entered Europe as a ports investor in 2004 with a minority stake in a container facility in Antwerp, Belgium. Cosco then made inroads starting in 2008 buying a concession to run facilities south of the Greek capital Athens at Piraeus, which it transformed into a world-class port. Pertinent to today's situation, Valencia in the 1980s was quick to adopt containerized shipping, which has been crucial to spurring world trade—and helped make China the world's top exporter for 16 years. Beijing gained control of the Port of Valencia in a European financial crisis. Wall Street's 2008-09 financial crisis had sparked major debt problems for corporate Europe, including for Spanish construction giant ACS Group. In 2010, ACS sold its interests in the Spanish ports of Valencia and Bilbao, plus various logistics operations, to a group led by J.P. Morgan Asset Management for 720 million euros, around $950 million at the time. As a private-equity investor with little interest in owning ports over the long-term, J.P. Morgan approached Cosco about buying, in part because of Cosco's success in Greece, a former executive involved said. Cosco agreed in 2017 to pay 200 million euros for 51% of the Valencia and Bilbao ports venture. Cosco called Valencia the natural port for Madrid and a 'perfect strategic fit" for its plans at 'developing a global terminals portfolio." A spokeswoman for J.P. Morgan declined to comment. As if to underscore Beijing's designs on Spain, a year after the deal Xi Jinping flew to Madrid to meet Spain's King Felipe VI and Prime Minister Pedro Sánchez, the first visit to the country for a Chinese leader in 13 years. He discussed the Mediterranean's role in his Belt and Road Initiative and pledged China would import goods worth $70 billion over the next five years. In fact, China's imports were closer to $45 billion in that period, nearly as much as it exports per year to Spain. Today, Valencia sits in the middle of a European network of Cosco ports that includes some of the region's biggest, including Greece's Piraeus, Italy's Genoa, Rotterdam in the Netherlands, Belgium's Zeebrugge and Germany's Hamburg. As Cosco's own ships began calling at Valencia, the port emerged as a busier container facility than its vaunted Piraeus operation, last year handling 5.47 million TEUs, or shipping container equivalents, versus the Greek port's 4.22 million. Also huge on the Mediterranean are Spain's Algeciras and Morocco's Tanger Med ports, though they are still smaller than northern European ports. Valencia now also ranks as the most connected port in the Mediterranean, based on its integration with container lines, according to a United Nations index. 'China is the largest trading economy in the world," said Liu of the Council on Foreign Relations and, 'if you want to export more, you need the infrastructure." Write to James T. Areddy at Daniel Kiss at and Ming Li at
Business Times
6 days ago
- Business
- Business Times
China threatens to block Panama ports deal unless its shipping giant gets stake: report
[BENGALURU] China is threatening to block the sale of more than 40 ports, owned by Hong Kong-based CK Hutchison, to BlackRock and Mediterranean Shipping Company (MSC) if the Chinese shipping company Cosco does not get a stake, The Wall Street Journal (WSJ) reported on Thursday (Jul 16), citing unnamed sources. BlackRock declined to comment on the report when contacted by Reuters. CK Hutchison, MSC and Cosco did not immediately respond to Reuters requests, while the Chinese government could not be immediately reached outside office hours. Chinese officials have told BlackRock, MSC and Hutchison that if Cosco is left out of the deal, Beijing would take steps to block Hutchison's proposed sale of the ports, the newspaper said. Tycoon Li Ka-shing's CK Hutchison in March announced it would sell its 80 per cent holding in the ports business, which encompasses 43 ports in 23 countries. The business has an enterprise value of US$22.8 billion, including debt. After much scrutiny and criticism in China, Hong Kong conglomerate CK Hutchison confirmed in May that Italian billionaire Gianluigi Aponte's family-run MSC, one of the world's top container shipping groups, was the main investor in a group seeking to buy the ports. BlackRock, MSC and Hutchison are all open to Cosco taking a stake, WSJ said. However, the parties would likely not reach a deal before a previously agreed upon Jul 27 deadline for exclusive talks between BlackRock, MSC and Hutchison, the report added. The proposed sale has also drawn the attention of US President Donald Trump, who has repeatedly expressed his desire to reduce Chinese influence around the Panama Canal and termed the deal a 'reclaiming' of the waterway after it was first announced. Reuters could not immediately verify the WSJ report. REUTERS
Straits Times
6 days ago
- Business
- Straits Times
China threatens to block Panama ports deal unless its shipping giant gets stake, WSJ reports
Find out what's new on ST website and app. Chinese officials have told BlackRock, MSC and Hutchison that if Cosco is left out of the deal, Beijing would take steps to block Hutchison's proposed sale of the ports. Bengaluru - China is threatening to block the sale of more than 40 ports, owned by Hong Kong-based CK Hutchison, to BlackRock and Mediterranean Shipping Company (MSC) if Chinese shipping company Cosco does not get a stake, the Wall Street Journal reported on July 17, citing unnamed sources. BlackRock declined to comment on the report, when contacted by Reuters. CK Hutchison, MSC and Cosco did not immediately respond to Reuters requests, while the Chinese government could not be immediately reached outside office hours. Chinese officials have told BlackRock, MSC and Hutchison that if Cosco is left out of the deal, Beijing would take steps to block Hutchison's proposed sale of the ports, the newspaper said. Tycoon Li Ka-shing's CK Hutchison in March announced it would sell its 80 per cent holding in the ports business, which encompasses 43 ports in 23 countries. The business has an enterprise value of US$22.8 billion (S$29.3 billion), including debt. After much scrutiny and criticism in China, Hong Kong conglomerate CK Hutchison confirmed in May that Italian billionaire Gianluigi Aponte's family-run MSC, one of the world's top container shipping groups, was the main investor in a group seeking to buy the ports. BlackRock, MSC and Hutchison all are open to Cosco taking a stake, WSJ said. However, the parties would likely not reach a deal before a previously agreed upon July 27 deadline for exclusive talks between BlackRock, MSC and Hutchison, the report added. Top stories Swipe. Select. Stay informed. World Trump diagnosed with vein condition causing leg swelling, White House says World Trump was diagnosed with chronic venous insufficiency. What is it? Singapore Driverless bus in Sentosa gets green light to run without safety officer in first for S'pore Asia Malaysia's King appoints Wan Ahmad Farid as new Chief Justice Singapore SPCA appoints Walter Leong as new executive director World US strikes destroyed only one of three Iranian nuclear sites, says new report Opinion Is your child getting drawn to drugs? Don't look away and don't give up Business Granddaughter of late Indonesian tycoon pays $25 million for Singapore bungalow The proposed sale has also drawn the attention of US President Donald Trump, who has repeatedly expressed his desire to reduce Chinese influence around the Panama Canal and termed the deal a 'reclaiming' of the waterway after it was first announced. Reuters could not immediately verify the WSJ report. REUTERS
New Straits Times
6 days ago
- Business
- New Straits Times
China threatens to block Panama ports deal unless its shipping giant gets stake, WSJ reports
WASHINGTON: China is threatening to block the sale of more than 40 ports, owned by Hong Kong-based CK Hutchison, to BlackRock and Mediterranean Shipping Company (MSC) if Chinese shipping company Cosco does not get a stake, the Wall Street Journal reported on Thursday, citing unnamed sources. Reuters could not immediately verify the WSJ report. CK Hutchison, MSC, BlackRock and Cosco did not immediately respond to Reuters' requests for a comment, while the Chinese government could not be immediately reached outside office hours. Chinese officials have told BlackRock, MSC and Hutchison that if Cosco is left out of the deal, Beijing would take steps to block Hutchison's proposed sale of the ports, the newspaper said. Tycoon Li Ka-shing's CK Hutchison in March announced it would sell its 80% holding in the ports business, which encompasses 43 ports in 23 countries. The business has an enterprise value of $22.8 billion, including debt. After much scrutiny and criticism in China, Hong Kong conglomerate CK Hutchison confirmed in May Italian billionaire Gianluigi Aponte's family-run MSC, one of the world's top container shipping groups, was the main investor in a group seeking to buy the ports. BlackRock, MSC and Hutchison all are open to Cosco taking a stake, WSJ said. However, the parties would likely not reach a deal before a previously agreed upon July 27 deadline for exclusive talks between BlackRock, MSC and Hutchison, the report added. The proposed sale has also drawn the attention of U.S. President Donald Trump, who has repeatedly expressed his desire to reduce Chinese influence around the Panama Canal and termed the deal a "reclaiming" of the waterway after it was first announced. (Reporting by Angela Christy and Mrinmay Dey in Bengaluru; Editing by Shinjini Ganguli)
New Straits Times
10-07-2025
- Business
- New Straits Times
Richard Li's China insurance deal falters over port sale concerns
KUALA LUMPUR: Billionaire Richard Li's efforts to expand his insurance business into mainland China have been put on hold after Beijing reacted with fury to his father Li Ka-shing's plan to sell a suite of global ports to BlackRock, Bloomberg News reported on Thursday. Richard, business tycoon Li Ka-shing's younger son, was in advanced talks to secure an insurance license in China, the report said, citing people familiar with the matter. The discussions were suspended shortly after the port sale was announced in early March amid growing uncertainty over Beijing's stance on the deal, the report said. A deal would have given FWD Group, Li's insurance firm, long-sought access to the lucrative Chinese market, possibly through an acquisition or partnership with a mainland insurance firm, it said. Reuters could not immediately verify the report. FWD Group declined to comment. Bloomberg had reported in March that China has instructed state-owned firms to pause new deals with businesses linked to Li Ka-shing and his family after his plan to sell two ports in Panama to a BlackRock-led consortium. FWD Group raised US$442 million through an initial public offering in Hong Kong earlier this week.
