The Panama Canal, partially operated by Hong Kong company CK Hutchison Holdings, has emerged as a new point of contention in the U.S.-China conflict. BlackRock, one of the world’s largest asset managers and close to former U.S. President Donald Trump, had announced on the 4th that it would acquire the operation rights of two out of five ports of the Panama Canal held by CK Hutchison Holdings, along with their entire overseas port business, for $22.8 billion. In response, on the 28th, Chinese authorities announced they’d investigate the transaction for potential anti-monopoly law violations.
This investigation has deferred the final signing that was expected to occur on the 2nd of the following month. The Financial Times noted that it is unusual for Chinese national agencies to investigate the specific transaction circumstances of a Hong Kong-based company. The Wall Street Journal also reported that Chinese President Xi Jinping was reportedly ‘infuriated’ by the deal.
Throughout his term, Trump emphasized regaining control of the Panama Canal from China. With the delay in the final contract due to Chinese opposition, the U.S.-China conflict surrounding the Panama Canal seems poised to intensify.
The Chinese regulatory authority, the State Administration for Market Regulation (SAMR), stated it was following the CK Hutchison and BlackRock deal closely to ensure fair competition and public interest according to the law. However, specific details about the investigation’s scope or start date remain undisclosed. The contract’s delay comes after Hong Kong authorities urged CK Hutchison to reconsider the deal from a national interest perspective, a sentiment echoed by China’s ensuing anti-monopoly probe.
CK Hutchison Holdings, owned by Hong Kong tycoon Li Ka-shing, holds dual citizenship in Hong Kong and Canada and conducts business worldwide, maintaining amicable relations with Chinese authorities.
Additionally, U.S. Secretary of State Marco Rubio selected Panama for his first overseas visit, urging a reduction of Chinese influence on the canal. He insisted on allowing American ships to pass through the canal free of charge and vowed U.S. protection if the canal were threatened.
The final contract date between BlackRock and CK Hutchison coincides with Trump’s agenda of imposing ‘reciprocal tariffs’ globally. The existing tariff tensions between the U.S. and China, compounded by the Panama Canal issue, signal escalating conflicts between the two nations.