Pro-Beijing paper urges Li Ka-shing to scrap Panama port sale


The sale of the two Panama ports may lead to an increase in the logistics costs of Chinese companies and threaten the long-term development of China’s manufacturing industry and foreign trade, the paper said. - Reuters

HONG KONG: A pro-Beijing newspaper has called on CK Hutchison Holdings Ltd to pull out from an agreement to sell its ports on the Panama Canal to a group led by BlackRock Inc, marking an escalation of a pressure campaign on billionaire Li Ka-shing over the deal.

The transaction will damage China’s national security and development interests, which directly violates Hong Kong’s laws on safeguarding national sovereignty, security and development interests, the Ta Kung Pao paper said in a commentary on Friday (March 21).

The article didn’t identify CK Hutchison as the Hong Kong company in question but did name BlackRock as the buyer.

CK Hutchison is expected to sign an agreement on the sale of its two Panama ports by April 2. It’s the key part of a wider deal to offload 43 facilities outside of Hong Kong and mainland China for more than US$19 billion in cash proceeds.

US President Donald Trump has hailed the sale as winning back control of the waterway from Chinese influence.

"Stop the transaction and do not make the wrong calculation,” the paper said in the article.

"Those who repeatedly emphasise that this deal is a ‘legal transaction’ under the freedom of contract are too naive and confused.”

FIRST PPE PROGRAMME IN MSIA FOR MULTIFACETED LEADERS

The paper has blasted CK Hutchison for "spineless grovelling” to Trump and "selling out all Chinese people” in previous commentaries, which were reposted by China’s top office on Hong Kong affairs, signalling the criticism reflects the government’s view.

Following the move, several prominent politicians, including the city’s leader John Lee, have also weighed in with veiled criticism. The latest article hasn’t been reposted by any Chinese agencies yet.

The growing calls on Li to reconsider the port sale highlight the political risks for companies based in Greater China amid rising trade tensions between the world’s two most powerful economies.

While CK Hutchison is based in Hong Kong, it has limited exposure to both the US and China. The conglomerate is registered in the Cayman Islands and accrues only 12% of its revenue from Hong Kong and the mainland, while Europe, Canada and Australia make up the bulk of the rest.

CK Hutchison slumped as much as 4.4% in Hong Kong on Friday after the company reported weaker-than-expected profit and warned in its earnings statement of a deteriorating global business environment due to geopolitical and trade tensions.

The Panama Canal is "of great significance to China’s national interests,” Ta Kung Pao said in its latest commentary.

As the second largest user of the waterway, China’s foreign trade stability and logistics costs are directly affected by its operation, it said.

The sale of the two Panama ports may lead to an increase in the logistics costs of Chinese companies and threaten the long-term development of China’s manufacturing industry and foreign trade, it said.

The transaction is a "concrete manifestation” of US attempts to put pressure on China’s supply chain by controlling key ports, it added.

"It is not an exaggeration to say that the transaction will cause endless troubles to China’s economy and national interests after it is completed,” the paper said.

Several Chinese state agencies have started looking into the deal for any potential national security or antitrust violations, Bloomberg reported earlier this week. - Bloomberg

 

 

Follow us on our official WhatsApp channel for breaking news alerts and key updates!
China , Li Ka Shing , Panama , Ta Kung Pao , CK Hutchison

Others Also Read


All Headlines:

Want to listen to full audio?

Unlock unlimited access to enjoy personalise features on the TheStar.com.my

Already a member? Log In