Hong Kong CK Hutchison conglomerate, belonging to billionaire Li Ka-shing, found himself in the heat of criticism from Chinese authorities due to the planned sale of its ports in Panama by the American BlackRock group. In the face of political pressures and announcements of an anti-monopoly investigation, the company suspended the signing of the agreement, which was to take place on April 2.
National safety over profit
The Hong Kong and Macau Office in Beijing has repeatedly voiced opposition to the transaction, publishing critical comments in pro-government media specified as Ta Kung Pao. In 1 of the articles, entitled "Do not act in agreement with the US hegemony, avoid historical error"stressed that port sales could undermine Chinese national safety and weaken the initiative Belt and Trail.
– We support legal supervision of this transaction to guarantee that it does not harm Chinese interests," said Jonathan Choi Koon-shum, an influential Hong Kong entrepreneur.
Suspension of the contract
According to Reuters sources, CK Hutchison will not sign the papers on April 2, although this does not mean breaking negotiations yet. This date was not the final date, and talks with the BlackRock consortium continue. The full transaction, covering 43 ports in 23 countries, is to bring CK Hutchison about $19 billion in cash.
US reaction and political tensions
The United States commented on the irony. “We are not amazed that China is unhappy due to the fact that they will lose control of the strategical trail,” said State Department spokesperson Tammy Bruce. Earlier, erstwhile president Donald Trump praised the deal, saying the US "recovery influence in the Panama Canal".
Future of a questionable transaction
Analysts indicate that Beijing's opposition may be the beginning of enhanced supervision of akin transactions, especially involving US companies. According to reports, Bloomberg, Chinese authorities have already ordered state-owned companies to halt cooperating with companies associated with the Li Ka-shing family.
“The companies should act in the interests of local communities and not just for profit,” said Jeffrey Lam Kin-fung, associate of Hong Kong authorities.
CK Hutchison did not comment on the case, but the force from Beijing could force the conglomerate to renegotiate terms or even retreat from the contract.
Sources: SCMP, Reuters
Leszek B. Glass
Email: [email protected]
© www.chiny24.com
