Chinese officials have launched an investigation into Cheung Kong Holdings' sale of ports in Panama and other areas, seeking to determine whether it involves the Anti-Monopoly Law. Meanwhile, the Hong Kong and Macau Affairs Office has reposted a Ta Kung Pao commentary on its official website, urging Cheung Kong Holdings to stop cooperating with US hegemony. The impact of China's escalating pressure on Cheung Kong Holdings will be worth watching.
The transaction of Cheung Kong Holdings selling Panama and other ports continues to ferment. Last Friday evening (March 28), the State Administration for Market Regulation of China responded on its official website in the name of the head of the Second Anti-Monopoly Department to the question of whether the transaction is subject to China's anti-monopoly review and approval. The State Administration for Market Regulation stated that it has noticed the transaction and will review it in accordance with the law to protect fair competition in the market and safeguard the public interest.
CCTV's new media outlet, "Yuyuan Tantian," subsequently published an article stating that the transaction involved major national interests and that selling the terminal was tantamount to handing a knife to an adversary. However, the article was subsequently removed from the platform. However, the Hong Kong and Macau Affairs Office and the Liaison Office of the Central People's Government in the Hong Kong Special Administrative Region simultaneously reprinted an article from Ta Kung Pao on Sunday (March 30th) supporting the SAMR's involvement in the review. The article also expressed the hope that Cheung Kong Holdings would "pull back from the brink," "refrain from compromising with US hegemony, avoid losing sight of the bigger picture, and avoid making a historic mistake."
Chinese Foreign Ministry spokesman Guo Jiakun responded to the incident on Monday (March 31), saying that the State Administration for Market Regulation will conduct an investigation in accordance with the law, and reiterated that China has always firmly opposed the use of economic coercion and bullying to infringe upon the legitimate rights and interests of other countries.
China's involvement in Panama and other port transactions is an abuse of power and an attempt to intimidate Li Ka-shing.
Xie Tian, a professor at the Aiken School of Business at the University of South Carolina, said it was unreasonable for the State Administration for Market Regulation to intervene in the investigation of the sale of ports in Panama and other places. He also said that according to China's Anti-Monopoly Law, only monopolistic behavior that occurs in the Chinese market can be investigated. He criticized the Chinese government's actions this time as an abuse of power.
Xie Tian said, "Li Ka-shing's dozens of ports are not even in China. Even if they have a monopoly, it's a monopoly of the global market, which has nothing to do with China's monopoly. Cheung Kong Holdings is a company registered in the Caribbean, Li Ka-shing is Canadian, and the ports are in Panama, where China has no jurisdiction. The CCP is using antitrust authorities to investigate or crack down on them. This is an act of intimidation. There is no legal basis for threatening Li Ka-shing and Cheung Kong Holdings, and it's an abuse of government power. The only threat China can now make is that if Li Ka-shing continues with his plan, other mainland Chinese and Hong Kong companies will be prohibited from cooperating with Cheung Kong Holdings, in order to isolate him."
Officials cited evidence that the deal was progressing smoothly, while China pressed for a delay to buy lobbying time.
Economist Commander also said that the Chinese government's move was selective law enforcement. He said that Li Ka-shing was once treated with courtesy by Chinese senior officials, but today he has become a traitorous businessman and a lamb to be slaughtered in the eyes of the Chinese government. The incident shows the business communities in China, Hong Kong and even the world how China manipulates enterprises. It also proves to the outside world that the Chinese government has exhausted all private means, but ultimately failed, so official intervention is required.
The commander said, "This selective enforcement is because the deal for Cheung Kong Holdings to sell Panama Ports is progressing much more smoothly than the Chinese government had imagined. If the government wanted to intervene and stop the deal, it would have had to find a legitimate reason to slow down or even halt it. The Market Supervision Bureau's intervention bought them (the Chinese government) some valuable time for lobbying. But this is just wishful thinking on the part of the Chinese government; it's unlikely to prevent Cheung Kong Holdings from ultimately completing the deal."
Analysis: Can CK Hutchison sell Panama and other ports? China has become the ultimate loser
Independent Chinese political scholar Chen Daoyin stated that the news that CK Hutchison Holdings would not complete the transaction on April 2nd as planned was leaked through Hong Kong media, not a formal announcement from either party, namely CK Hutchison Holdings and its US consortium. He believes that combining the release of this information, the Anti-Monopoly Law investigation, and the official reposting of critical articles, the overall situation is a campaign of verbal and military intimidation by the Chinese government against CK Hutchison Holdings, with the commentary pointing the finger at the company on how to proceed. However, he stated that regardless of whether CK Hutchison Holdings ultimately compromises, China has become the loser in this incident.
Chen Daoyin said, "Whether this deal succeeds or not, the loser will be the Chinese government. This is because the world has entered a period of deglobalization. If the Chinese government's intervention derails this deal, the world will see that the Chinese government's actions are inconsistent with its words. Furthermore, the Trump administration has been arguing that both mainland Chinese and Hong Kong companies are effectively controlled by the Chinese government or the Chinese Communist Party. If the Chinese government can disrupt a purely market transaction through intervention, it proves that these companies lack autonomy and must obey China's national interests. Your actions reinforce this point."
Chen Daoyin stated that the success of the transaction remains to be seen, but the market has its own laws and logic, and companies must be honest and committed. He also said that China's intervention in the transaction will not only accelerate the withdrawal of funds from Hong Kong and mainland China by Cheung Kong Holdings and BlackRock, but will also accelerate the flight of other foreign investors from China.
