After the US and China announced a 90-day truce in their tariff war, China shifted its focus back to the Panama Port deal. That same day, the Hong Kong and Macau Affairs Office issued further statements, and the Hong Kong government suddenly proposed enacting subsidiary legislation to safeguard national security. This prompted Cheung Kong Hutchison Holdings (CK Hutchison) to state that "there is absolutely no way it would be illegal or non-compliant." These series of official actions have sparked concern about the impact on the deal.
CK Hutchison Holdings is selling its port operating rights, including those in Panama, with the transaction expiring at the end of July. CK Hutchison Holdings issued a statement on Monday evening (May 12th), stating that due to continued shareholder and media inquiries regarding the port transaction, it had moved up its scheduled annual general meeting on the morning of May 22nd to address the situation. This statement demonstrates that the transaction could not be conducted under any illegal or non-compliant circumstances. CK Hutchison Holdings reiterated that completion of the transaction is subject to a series of conditions, including legal and regulatory consents and approvals, the absence of any illegal or prohibited circumstances, the necessary approvals of the company's shareholders, and other appropriate and customary conditions stipulated in the definitive documents.
Cheung Kong Holdings issued a late-night statement in response to analysis of the port deal: speculation stems from the Hong Kong government's new national security regulations.
CK Hutchison's statement on the port sale was widely reported by Chinese and international media, and the news also trended on Weibo. Liu Mengxiong, a former member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), has written numerous articles commenting on CK Hutchison's sale of the port. He told RT-Mart that CK Hutchison's response to the port sale before the shareholder meeting was unusual. He believes the move was related to speculation sparked by the Hong Kong Legislative Council's sudden emergency meeting on Monday to discuss arrangements for subsidiary legislation safeguarding national security.
Liu Mengxiong said, "I wonder if the emergency meeting was aimed at the Cheung Kong Holdings transaction. The Ta Kung Pao and Wen Wei Po have recently repeatedly advocated for the use of the National Security Law to address this matter. However, not a single inch of the 43 ports and 199 berths in these 23 countries belongs to China or Hong Kong. Furthermore, when Cheung Kong Holdings (Cheung Kong Holdings) purchased the ports, you (the Chinese government) never once stated that it was beneficial to China's sovereignty, security, and development interests. Why are you saying that selling them now is linked to your country's sovereignty, security, and development interests? Are you using the National Security Law to censor them? This is groundless, absurd, and unreasonable."
Liu Mengxiong said that in the face of Cultural Revolution-style criticism from pro-China media in recent days, the wording used by Cheung Kong in its statement was also very subtle, and it is believed that it implies that the transaction will continue.
Liu Mengxiong said, "The completion of the transaction depends on the fulfillment of a series of conditions, including the approval of legal and regulatory authorities, which is remarkable. Because these terminals are located in 23 overseas countries, whether they are illegal or not has nothing to do with the Chinese government. When the terminals were purchased in the past, no approval from the Chinese government was required. Logically, the sale certainly does not require approval from the Chinese government or the Hong Kong Special Administrative Region.
Liu Mengxiong suggested that the most direct way to solve the problem is for the Chinese government to buy back the operating rights of ports in Panama and other countries through China Merchants Group and other companies at a price higher than that of foreign consortiums.
The escalation of systemic threats against CK Hutchison Holdings is related to China's Indo-Pacific strategic deployment in Panama ports.
On the same day that Cheung Kong Holdings issued its statement, Xia Baolong, Director of the Hong Kong and Macau Affairs Office, met with business leaders in Macau, urging them to maintain a clear-headed stance. He urged the business community and entrepreneurs in Hong Kong and Macau to "kneel down" and beg for mercy in the face of hegemonic actions, and to advocate for "businesses pursuing profit purely" without regard for national interests, a behavior deemed spineless by the Chinese people. He also emphasized that those who stand up and resolutely fight, even those wearing electronic anklets, are heroes.
Chen Daoyin, an independent Chinese political scholar, said that the Hong Kong government's establishment of a new national security law, Xia Baolong's remarks, and the pro-China media's advocacy of the use of the National Security Law to review transactions can be seen as China's escalating pressure on Cheung Kong Holdings. It also shows that China attaches great importance to the operating rights of Panama ports, which is related to geopolitics and military deployment.
Chen Daoyin said, "If we were still in the era of globalization, the world would be flat, and everyone would trade peacefully, then who controlled the (Panama) port wouldn't matter. The current reaction is due to military strategic needs in the Pacific or the Taiwan Strait, but the key lies in Panama's (Panama's) military strategic value. If China were to attack Taiwan, it would certainly want a swift victory and cut off foreign aid, a factor that needs to be considered in battlefield planning. The Panama Canal might be a way to stop US warships. However, the Chinese government is currently escalating its war of words, trying to get Cheung Kong Holdings to give up. Frankly, this cautious approach is ineffective. So Cheung Kong Holdings' response is quite clever, insisting on compliance and legality, and that the transaction must proceed."
Chen Daoyin said that China is well aware that its development cannot be separated from the world, and does not want to use national power directly to stop the transaction. It only dares to use indirect methods to exert pressure, hoping to reduce concerns about foreign investment in China.
China's intervention in Panama port deal backfires
The economist commander said that taking Australia's recent attempt to take back the Darwin Port from Chinese capital as an example, it shows that the Chinese government's pressure on Cheung Kong Holdings has aroused the vigilance of countries such as the European Union and Australia, and they are investigating the issue of China's economic penetration in the local area.
The commander said, "In fact, China's interference in the Panama port transaction has attracted the attention and investigation of Western economic intelligence agencies, and they have uncovered more evidence that China's motives behind its investment in the port are not simple. As a result, the EU and Australia have begun to scrutinize Chinese capital more strictly. I believe the backlash from the Chinese government's actions on the Cheung Kong Holdings issue has only just begun."
The commander believes that when Chinese capital invests in infrastructure or ports in other countries in the future, it will encounter greater resistance and questioning from local politicians and society.
