China, Hong Kong Cry Foul on Panama Ports Deal

China and Hong Kong have officially taken a stance on the sale of the ports on both sides of the Panama Canal to a BlackRock-led consortium—and predictably, the response is highly critical of the $23 billion transaction.

In a Tuesday press conference, Chinese foreign ministry spokesperson Mao Ning affirmed the Chinese Communist Party’s (CCP) disappointment in the deal, without specifically naming the U.S. or the Trump administration.

“China firmly opposes moves that infringe on and undermine other countries’ legitimate rights and interests through economic coercion, hegemonism and bullying,” Mao said.

President Donald Trump had reiterated since before his return to the Oval Office that the U.S. would “take back” the Panama Canal on the pretense that China was controlling the waterway. The rhetoric was a likely determinant in Hong Kong-based CK Hutchinson Holdings’ decision to sell the Balboa and Cristóbal ports. And various reports indicate that BlackRock CEO Larry Fink reached out to Trump in the wake of his comments to set a possible transaction in motion.

Hong Kong’s chief executive John Lee Ka-chiu referred to similar “bullying tactics” in his own conversation with reporters, while avoiding any mentions of the U.S. or President Trump.

“These concerns deserve serious attention,” Lee said, noting that the Hong Kong government urges foreign governments to provide a fair environment for businesses like those in Hong Kong. “We oppose the abusive use of coercion or bullying tactics in international, economic and trade relations.”

Lee said any business transaction must comply with Hong Kong’s laws. The special administrative region will handle it according to the law, he said without elaborating.

Chinese state media put out two op-ed commentaries trashing the deal, shedding light into the opinions of both the CCP and Hong Kong governments.

The first of two articles published in Hong Kong-based Ta Kung Pao said the deal was a “spineless kneeling, profit-seeking and unrighteous act” that betrays and sells out the Chinese people. The second piece targeted the U.S. more directly.

“Why were so many important ports transferred to ill-intentioned US forces so easily?” the article read. “What kind of political calculations are hidden in the so-called commercial behavior on the surface?”

State offices in Hong Kong and Macau reposted both articles, effectively representing more endorsement from the CCP.

The heat has already gotten to CK Hutchison, which canceled press and investor calls planned around its earnings report on Thursday in the wake of the criticism.

At the time of the deal, which also saw CK Hutchison part ways with another 43 ports in 23 countries, co-managing director Frank Sixt insisted the sale was “purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama Ports.”

China sent a senior-level delegation to Panama last week to meet with major political parties, according to Chinese state news agency Xinhua.

Ma Hui, a vice minister of the CCP’s diplomacy arm, said China was “willing to strengthen exchanges with Panama’s political parties and think tanks, enhance mutual understanding and trust, and consolidate the public support foundation for friendly China-Panama relations.”

Behind the scenes, China President Xi Jinping has reportedly expressed anger over the deal, in part because CK Hutchison didn’t ask for approval of the deal in advance.

The CCP had originally planned to use the Panama port issue as a bargaining chip in negotiations with the Trump administration, according to a report from the Wall Street Journal.

The dynamic doesn’t quell many of the concerns of both the White House and Congress of Chinese influence over the Panama Canal, as it gives a clear signal that—like Washington—Beijing sees the port assets as integral to geopolitical interests in the region.

It is unclear what steps the Chinese government will take in response to the deal. CK Hutchison is a publicly traded firm, but remains subject to a broadly defined national security law that Beijing imposed on Hong Kong in 2020. That sprawling regulation punishes collusion with foreign forces

China’s government could still review the transaction. The country’s primary antirust regulator, the State Administration for Market Regulation, could have extra-territorial jurisdiction by applying the country’s anti-monopoly law, if a deal outside mainland China either eliminates or curbs competition in its domestic market.

Authorities could also invoke security review measures aimed at examining foreign direct investments in fields relating to national security, including infrastructure. Although CK Hutchison is registered offshore, it has businesses and a presence in China, which Beijing could use as justification for implementing the review.