Hong Kong Chief Executive John Lee has criticized the “bullying tactics by foreign governments” in the wake of the controversial US$23-billion sale of dozens of port facilities -- including those in the Panama Canal -- by homegrown conglomerate CK Hutchison to U.S. investment giant BlackRock.
BlackRock and CK Hutchison, which is controlled by Hong Kong billionaire Lee Ka-shing, announced earlier this month that they had reached an agreement in principle for BlackRock to acquire CK Hutchison’s 90% interests in Panama Ports, which owns and operates the Panama terminals Balboa and Cristobal.
BlackRock will also buy CK Hutchison’s 80% controlling interest in a further 43 ports in 23 other countries, the companies said in a joint statement dated March 4.
The sale came amid growing calls in Washington for action to loosen Beijing’s influence stemming from Chinese and Hong Kong companies' control over key infrastructure on the Panama Canal and other port facilities in the Western hemisphere.
On Feb. 3, U.S. Secretary of State Marco Rubio threatened Panamanian leader José Raúl Mulino with potential American retaliation if his country didn’t immediately reduce Chinese influence over the canal.
Lee said concerns about the deal “deserve serious attention,” possibly hinting at some form of legal action.
“We oppose the abusive use of coercion or bullying tactics in international, economic and trade relations,” Lee told journalists in Hong Kong on Tuesday, adding that Hong Kong would handle any commercial transaction “according to the law.”
“The Hong Kong Special Administrative Region Government urges foreign governments to provide a fair and just environment for enterprises, including enterprises from Hong Kong,” he told journalists at a regular briefing on Tuesday.
The ruling Chinese Communist Party responded by sending a delegation to Panama led by Ma Hui, vice-minister of the Central Committee’s International Department, state news agency Xinhua reported.
“China is willing to strengthen exchanges with Panamanian political parties and think tanks, enhance mutual understanding and trust, and solidify public support for friendly relations between China and Panama,” it quoted Ma as saying on March 17.
The visit came as Communist Party-backed media criticized the CK Hutchison port sale, citing a “close personal relationship” between BlackRock and the administration of U.S. President Donald Trump.
Hong Kong’s Ta Kung Pao newspaper said the Trump administration had “directly and blatantly intervened and manipulated the deal without scruple, using it as a way to promote their global hegemony.”
“Now that the Panama Canal has been Americanized and politicized, the United States will definitely be using it to promote its own political agenda,” the paper said, citing “huge risks” for Chinese companies' shipping costs and supply chains.
It said plans to charge Chinese ships bigger docking fees could affect China’s shipping industry, foreign trade and President Xi Jinping’s “Belt and Road” global supply chain, infrastructure and influence program.
“This is power politics packaged as commercial behavior,” the paper said in an editorial that was posted to the official website of Beijing’s Hong Kong and Macao Affairs Office (in Chinese).
It said accusations on social media that CK Hutchison had engaged in “spineless grovelling and profit-seeking while disregard the national interest” were “completely understandable.”
“The company concerned should think twice ... and think carefully about what side it’s on,” the paper said.
Neither China’s State Administration for Market Regulation nor the Hong Kong and Macao Affairs Office of the State Council had responded to requests for comment by the time of publication.
Financial analyst Simon Lee said Lee Ka-shing was caught between a rock and a hard place.
“If he sells, he’s done for. If he doesn’t sell, he’s done for,” Lee said. “It seems that it’s no longer possible to be just a business, whether in China or the United States.”
“Now you have to pick a side -- you can’t just do business like you could before.”
Translated by Luisetta Mudie. Edited by Malcolm Foster.