Pro-Beijing Paper Urges Li Ka-shing to Scrap Panama Port Sale

(Bloomberg) — A pro-Beijing newspaper has called on CK Hutchison Holdings Ltd. to pull out from an agreement to sell its ports on the Panama Canal to a group led by BlackRock Inc., marking an escalation of a pressure campaign on billionaire Li Ka-shing over the deal. 

The transaction will damage China’s national security and development interests, which directly violates Hong Kong’s laws on safeguarding national sovereignty, security and development interests, the Ta Kung Pao paper said in a commentary Friday. The article didn’t identify CK Hutchison as the Hong Kong company in question but did name BlackRock as the buyer. 

CK Hutchison is expected to sign an agreement on the sale of its two Panama ports by April 2. It’s the key part of a wider deal to offload 43 facilities outside of Hong Kong and mainland China for more than $19 billion in cash proceeds. US President Donald Trump has hailed the sale as winning back control of the waterway from Chinese influence. 

“Stop the transaction and do not make the wrong calculation,” the paper said in the article. “Those who repeatedly emphasize that this deal is a ‘legal transaction’ under the freedom of contract are too naive and confused.” 

The paper has blasted CK Hutchison for “spineless groveling” to Trump and “selling out all Chinese people” in previous commentaries, which were reposted by China’s top office on Hong Kong affairs, signaling the criticism reflects the government’s view. Following the move, several prominent politicians, including the city’s leader John Lee, have also weighed in with veiled criticism. The latest article hasn’t been reposted by any Chinese agencies yet. 

The growing calls on Li to reconsider the port sale highlight the political risks for companies based in Greater China amid rising trade tensions between the world’s two most powerful economies. So far, Chinese officials haven’t explicitly given the 96-year-old Li and his firm any demands or instructions. But if Beijing does decide to take a tougher approach, it could raise concerns that sweeping national security laws imposed on Hong Kong since 2020 might ensnare businesses’ assets and operations. 

While CK Hutchison is based in Hong Kong, it has limited exposure to both the US and China. The conglomerate is registered in the Cayman Islands and accrues only 12% of its revenue from Hong Kong and the mainland, while Europe, Canada and Australia make up the bulk of the rest.

CK Hutchison slumped as much as 4.4% in Hong Kong on Friday after the company reported weaker-than-expected profit and warned in its earnings statement of a deteriorating global business environment due to geopolitical and trade tensions. 

The Panama Canal is “of great significance to China’s national interests,” Ta Kung Pao said in its latest commentary. As the second largest user of the waterway, China’s foreign trade stability and logistics costs are directly affected by its operation, it said. 

The sale of the two Panama ports may lead to an increase in the logistics costs of Chinese companies and threaten the long-term development of China’s manufacturing industry and foreign trade, it said. The transaction is a “concrete manifestation” of US attempts to put pressure on China’s supply chain by controlling key ports, it added. 

“It is not an exaggeration to say that the transaction will cause endless troubles to China’s economy and national interests after it is completed,” the paper said. 

Several Chinese state agencies have started looking into the deal for any potential national security or antitrust violations, Bloomberg reported earlier this week. 

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