China Takes Steps to Block Sale of Strategic Panama Ports

Chinese authorities are taking decisive action to obstruct a contentious deal involving the sale of key ports in the Panama Canal Zone, initiated by Hong Kong tycoon Li Ka-shing. The 96-year-old owner of CK Hutchison Holdings, who intended to sell the assets to an American consortium, has drawn the ire of Chinese President Xi Jinping, according to a report by The Wall Street Journal citing sources familiar with the matter. With a fortune estimated at $38 billion, Li Ka-shing ranks as the 41st richest person in the world and has historically maintained close ties with China’s leadership. However, his unexpected decision to sell the ports without prior consultation with Beijing has raised questions about his motives and independence.

On March 15, an article published on the website of the Hong Kong and Macau Affairs Office of the Communist Party of China criticized the proposed deal, warning that transferring control of crucial port facilities to American interests—perceived as having ulterior motives—could undermine national security. The article expressed concerns about hidden political agendas masked as commercial interests. Hong Kong President John Lee noted in a press conference that the intense public discourse surrounding the sale reflects widespread anxieties that must be addressed.

Just three days later, Bloomberg reported that China’s State Administration for Market Regulation had been directed to conduct a comprehensive review of the deal to ensure compliance with Chinese law, particularly regarding security implications. This move signaled Beijing’s intent to block the transfer of control of the ports to an American group led by investment firm BlackRock, a development that runs counter to U.S. President Donald Trump’s plans to enhance American influence in the strategically vital region.

The deal involves the sale of the Balboa and Cristobal ports, situated at either end of the Panama Canal, for $19 billion. Announced on March 4, 2025, the transaction was framed as a response to Trump’s characterization of Chinese control over the canal as a threat to U.S. security. However, Beijing’s strong response has raised new concerns about that very security. As of late March 2025, reports indicated that CK Hutchison had refrained from signing the final agreement, originally scheduled for April 2, amid escalating pressure from China. The Chinese antitrust agency has launched an investigation, citing the need to safeguard competition and national interests.

In Panama, local authorities have begun an audit of CK Hutchison’s contract, with the country’s attorney general previously labeling it unconstitutional, adding further legal uncertainty to the deal. The dispute over the ports underscores a broader geopolitical struggle, with Trump describing the agreement as a “return” of the canal to U.S. control, while China views it as a direct threat to its influence over vital trade routes.

In response, Beijing has indicated potential sanctions on companies associated with the Li family and has hinted at a review of BlackRock’s investments in China. The developments have caused CK Hutchison shares to drop by 5% within a week, reflecting investor apprehension.