China has condemned a proposed $22.8 billion sale of Panama Canal ports to BlackRock, labeling it a “spineless groveling” act. This criticism has resulted in a drop in shares for CK Hutchison, the seller. Concerns regarding necessary regulatory approvals from China have arisen, reflecting broader geopolitical tensions.
China has criticized a proposal to sell ports in the Panama Canal to BlackRock, referring to the plan as “spineless groveling” and a “betrayal” of the Chinese populace. This critique emerged from a commentary in the state-owned Ta Kung Pao newspaper, which significantly impacted the stock performance of CK Hutchison, the owner of the ports, causing a drop of over 6% in share prices.
The critics argue that investor apprehension around the deal’s successful completion reflects underlying concerns regarding Chinese regulatory approval, despite assurances from analysts like Dan Baker of Morningstar. Baker stated that CK Hutchison retains control of its other Chinese ports, indicating regulatory hurdles may not be a significant issue, yet market reactions suggest uncertainty persists.
The investment group, led by BlackRock, plans to acquire the ports at either end of the canal, paying $22.8 billion to CK Hutchison, along with additional controlling interests in 43 other ports globally. The consortium has described the agreement as being in principle.
U.S. President Donald Trump has previously expressed intentions to regain control of the Panama Canal from Panama, framing Chinese port ownership as a movement of interest in the canal’s operations. This historical context heightens the scrutiny surrounding any foreign acquisition impacting the canal.
The proposed sale offered CK Hutchison a way to divest from a politically sensitive issue while securing a substantial financial gain, with expectations of cash proceeds exceeding $19 billion. However, a recent commentary pointedly admonishes CK Hutchison, suggesting it prioritize national justice and reflect carefully on its commitments amidst the controversy regarding the sale, which it deems a serious matter.
The ongoing debate surrounding CK Hutchison’s sale of Panama Canal ports to BlackRock highlights significant geopolitical and financial tensions. The criticism from Chinese media underlines national sentiment concerning foreign ownership and illustrates investor anxiety regarding potential regulatory responses from Beijing. Ultimately, the transaction’s fate remains uncertain as stakeholders navigate these complex dynamics.
Original Source: keyt.com
