Why is China angry at a plan to sell two outlets on Panama channel? | Business and Economics News

CK Hutchison, one of the largest conglomerates in Hong Kong, announced earlier this month plans to sell its share in two Ports on Panama Channel For a group of American investors led by Blackrock.

The plan, which is part of Migadial worth $ 22.8 billion, would give the union control over more than 40 outlets in 23 countries, complaints from US President Donald Trump that the main shipping road was under Chinese control.

CK Hutchison shares increased after the deal news on March 4, but they fell less than two weeks after TA Kung Pao, a Chinese newspaper run by the state in Hong Kong, the company in two articles of “unintended construction” and cut the deal “betrayed and sold all Chinese”.

With a deadline on April 2 to sign the deal on the horizon, CK HUTCISON is now at the intersection of Washington and Beijing.

Why does China want to stop the deal?

The opening articles are often read in TA Kung Pao, which are controlled by the Beijing Call Office in Hong Kong through a subsidiary, as signs of the Supreme ranks of the Communist Party of China.

Hong Kong John Lee, who was elected as a single candidate in Beijing -controlled elections, criticized CK HUTCISON, saying that she deserves “serious attention.”

The Wall Street Journal reported earlier this month that the anger of the deal extended to Chinese President Xi Jinping.

Quoting sources whose name was not revealed on this issue, the newspaper said that Xi was angry that CK HUTCISON did not ask for his approval of the deal and that he was hoping to use Panama channel ports like bargaining with Trump, who pledged to “restore” the strategic waterway.

On Friday, the Chinese market organizer said in the official WeChat account that he will be investigated to combat monopoly “according to the law to protect fair competition in the market and protect the public interest.”

In the aftermath of the news, local media, including Sing Tao Daily and South China Morning Post, reported that CK Hutchison will not progress with the deal this week.

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What is Beijing’s relationship with CK Hutchison?

The proposed sale also highlighted the long tensions between Beijing and CK Hutchison and its 96-year-old billionaire, Li Ka-hitting.

The rise of me from a Chinese -born refugee to Hong Kong real estate is almost a legendary position in the Chinese region, a former British colony, as he built his reputation by moving in Western commercial interests and the Communist Party.

I was known for his close relationships with Chinese leaders Deng Xiawing and Jiang Zimin, who supervised the economic opening of China between the late 1970s and early first decade of the twentieth century, but his political influence faded after Xi climbed to the best job in 2012.

In 2015, he raised the eyebrows when he restructured his commercial interests and recorded them in the Kayman Islands. At this time, he also started getting rid of China.

In 2018, he conveyed to me control of his company to his son, Victor, but colleagues remained in the limelight. The following year, I was angry with the pro -Bockin commentators with his contradictory comments on Hong Kong Mass Prisoners supporting democracy At a time when other companies in the city were publicly criticizing the demonstrations.

While analysts have made different opinions on whether the LI family is supported by the support of democracy in Hong Kong, there is a wide agreement that it is less clear than many other business strains in the city.

“Compared to other family offices of his generation-such as the FOK and PAO family, which invested on the mainland early in the eighties, or the Tung family, which is active in China-American relations, Wilson Chan, Wilson, and its director of politics in Hong.

Can Beijing prevent the sale from moving forward?

Chan said that Beijing is relatively restricted in terms of the official organizational authority to stop the deal.

“From a strict legal point of view, it will be very difficult for Beijing and Hong Kong to cancel the deal, given that the companies and ports concerned are not” legally “in China and Hong Kong,” he said.

Rooney Tong, Hong Kong’s lawyer and member of the city’s executive council, said the investigation of monopoly could be considered “deterrent” against CK Hutchison to move forward in the deal.

Tong said that the Chinese organizers do not usually intervene to prevent Hong Kong’s business deals, but they are within the limits of their rights to the investigation.

“If people continue their commercial activities unlike the law, they must be investigated to see if they have stumbled in the law,” Tong told Al -Jazeera.

Experts cited in the South China Post China said that the Chinese organizers can claim the judicial jurisdiction of the deal by saying that Black Rock’s acquisition of many ports would give them a monopoly on regional trade methods.

However, proving that the deal will have a negative impact on the competition may be more difficult, while calling national security concerns may be a challenge because Blackrock is a private company, according to experts quoted the Post.

Martina Fox, a business correspondent for the state -run Chinese news agency, said she expects the deal to be delayed or canceled because it has become “very ecumented.”

“China’s criticism of the CK Hutchison step to sell ports also reflects its strategic interests in the region on the one hand, and the increasing pressure from US President Donald Trump to reduce the influence of China as well as concerns about national security on the other hand,” Fox said of the increasing pressure of US President Donald Trump to reduce China’s influence as well as concerns about national security on the other hand.

She said: “CK Hutchison is pushing to the intersection in the midst of the trade war that was rising from China and the United States reflecting how both powerful fights to control the strategic waterway.”

What is the other pressure that Beijing can apply?

Even without passing through official legal channels, Beijing can be applied in other ways.

CK Hutchison and business services on the mainland are a point of weakness, according to the analyst that covers the Chinese economy, which occurs provided that its identity is not disclosed due to the political sensitivity of the issue.

While CK Hutchison has finished its investments in China, it still earns about 12 percent of its revenues from China – which represents more than $ 300 million in 2024.

The analyst said her sister, CK Asset Holdings, still has dozens of properties on the mainland of China, which means that she is very exposed to Beijing.

He said that Hong Kong’s foreign and local companies will closely see to find out what will happen next.

The analyst said: “The broader LI group of companies still has a large amount of assets on the mainland, such as CK Asset’s property holdings. Certainly, she realizes that she can be exposed to revenge on Beijing,” the analyst said.

Kevin Yam, a lawyer who specializes in financial services and commercial litigation until Hong Kong left in 2022 that Beijing could use the deal to make an example of the Lee family, as it did with the founder of Alibaba Jack MA.

After criticizing the organizers in China in 2020, MA was forced to cancel the general subscription of Ant Financial, a financial subsidiary in alibaba.

Since then, he only has Rarely seen In public places.

“Hong Kong Kong, it is possible that a family of Lee will not cut into the same size as they did with Jack Ma, but I think it is eventually, anything that will go … it will not be directly about the deal.”

Beijing has not moved away from using methods outside the judiciary against prominent citizens in the past.

In 2017, Canadian Chinese businessman Xiao Jianua-who was then among the richest people in China-from the luxurious hotel where he lived in Hong Kong, where multiple media reported that she was kidnapped by Chinese agents on the mainland.

The Xiao flour place remained unknown for five years until 2022, when the Shanghai court sentenced colleagues to 13 years in prison for embezzlement $ 8 billion.

In 2023, Bao Fan, a Chinese -influential technology bank, went to Incommunicado amid a campaign against the financial services industry.

Bao, whose company announced his resignation last year, has not been publicly heard since then.

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What is the following for the CK Hutchison?

With only one day to go until the deadline on April 2, the fate of the sale is unclear.

While Chinese organizers are looking into the deal, the Hong Kong government has not yet been achieved, according to Long, who sits in the CEO of Hong Kong.

On the Chinese mainland, the government appears to use both carrots and sticks.

Last week, Lee Richard’s son was invited to the Chinese Development Forum, a high -level business summit held annually in Beijing.

While Richard does not participate in the CK Hutchison administration, the markets have interpreted his call as a positive sign of the company’s relations with Beijing, which sent its shares by 3.4 percent on Monday.

However, Bloomberg reported on Thursday that Beijing issued a directive to state -owned institutions to stop new business with CK Hutchison and its subsidiaries, citing the people familiar with the matter.

Although it is still not certain whether CK Hutchison and Blackrock will go ahead with the deal, the delay will not necessarily stop it in its paths.

According to what was reported, the deal includes the uniqueness of 145 days for negotiations, and after that time, CK Hutchison will be free to sell its assets to another party, according to The Post.

The publication said that neither of the parties did not reveal “the beginning or the end” of the period of uniqueness.

Tong said it was difficult to say more without an official word from CK Hutchison or Blackrock.

“Very few facts are known to the public,” he said. “(CK Hutchison) keeps my mother, and does not say anything at all, so that people can only adventure to guess what is happening.”