China Condemns BlackRock’s Proposed Acquisition of Panama Canal Ports
China criticizes the plan to sell Panama Canal ports to BlackRock, describing it as spineless and a betrayal of Chinese interests. The deal has triggered a significant drop in CK Hutchison’s stock price, reflecting investor apprehension regarding potential Chinese regulatory influence. Meanwhile, the transaction, worth $22.8 billion, is seen as a strategic move for CK Hutchison amid ongoing tensions regarding control over the Panama Canal.
China has issued a strong denunciation of the proposed sale of its Panama Canal ports to the American investment firm BlackRock. This criticism has been conveyed through a commentary in the state-run Ta Kung Pao newspaper, labeling the proposal as “spineless groveling” and a “betrayal” of the Chinese populace. Following the announcement, shares of CK Hutchison, the Hong Kong-based operator of the ports, saw a decline of over 6%.
Market analysts suggest that the sell-off may indicate investor trepidation regarding the potential for Beijing to intervene and impede the deal. Dan Baker, a senior equity analyst at Morningstar, remarked that CK Hutchison may not require Chinese regulatory approval, given its retention of other Chinese ports. Nevertheless, the mounting concerns of political influence may still threaten the transaction.
Last week, a consortium led by BlackRock proposed a $22.8 billion acquisition of the ports at either end of the Panama Canal, alongside CK Hutchison’s controlling stake in numerous other ports globally. The group’s assertion of a preliminary agreement has garnered attention. Historically, former President Donald Trump expressed intentions to reclaim control of the Panama Canal from Panama, reaffirming a narrative regarding Chinese presence in port operations.
This sale is perceived as a strategic decision by CK Hutchison, backed by renowned investor Li Ka-shing, to divest from a politically sensitive business while securing an advantageous financial transaction. The anticipated cash proceeds from this sale are projected to exceed $19 billion, surpassing prior estimates on port valuations. However, the recent critical remarks from the state-aligned publication might complicate matters.
The commentary accused CK Hutchison of prioritizing profit over national interests, urging the company to reconsider its stance on the sale. The Panama Canal, constructed by the United States in the early 1900s and handed over to Panama in 1999, remains a vital route for global trade and U.S. military logistics, handling a significant portion of world maritime traffic. Despite Trump’s assertions, the canal has been operated by Panama since its transfer, negating claims of Chinese control over the facility.
In conclusion, the proposed sale of Panama Canal ports to BlackRock has ignited significant backlash from China, described as a betrayal by state media. The market response indicates concerns over the feasibility of the transaction in light of potential political intervention. Despite the financial motivations behind CK Hutchison’s decision, the controversy generated by the Chinese government may jeopardize the deal’s success. The Panama Canal remains a crucial global trade artery, further complicating the geopolitical dynamics at play.
Original Source: keyt.com
