Trump targets Hong Kong company in world purge

Mark Pinkstone/Former Chief Information Officer of HK government

The American dictatorship of President Donald Trump and his sidekick, Secretary of State Marco Rubio is nothing short of a litany of lies told to Panamanian President Jose Raul Mulino to break off Belt and Road Initiative (BRI) ties with China.

Before taking over the presidency of the US, Trump told the press, “China is running the Panama Canal that was not given to China, that was given to Panama foolishly, but they violated the agreement, and we’re going to take it back, or something very powerful is going to happen,”

With that mindset, Trump sent China hawk Rubio off to Panama with the threat of taking back the canal unless the Chinese were kicked out.

The only problem with the plan is that China has never had any interest, let alone control over the Panama Canal.

A sole Hong Kong conglomerate, Hutchison Port Holdings, controlled by Hong Kong billionaire Li Ka-shing, has two ports at either end of the canal operated by its subsidiary Panama Ports Company. There are also three other ports along the canal operated by private companies, all of which are used for loading and unloading cargo and providing fuel for vessels vying the waterway. They have no control over which vessels can use the canal, nor do they collect tolls for its use. This is the responsibility of the Panama Canal Authority, whose administrator, deputy administrator, and 11-member board are selected by Panama’s government but operate independently.

Hutchison Port Holdings (PH) is the world’s largest port operator across Europe, the Americas, Asia, the Middle East, and Africa. It operates in five of the seven busiest container ports in the world, handling 13 per cent of the world's container traffic. Revenue in 2023 amounted to US$4.2 billion.

HPH has routinely topped the list of port terminal operators ever since it expanded worldwide in 1991. It currently operates nearly 300 berths across 48 important ports around the world including the Port of Barcelona, Port of Buenos Aires, Port of Busan, the Thames Port of London, and the Port of Botany (Sydney)

During his visit to Panama, Rubio wrote in a post on X that "the United States cannot, and will not, allow the Chinese Communist Party to continue with its effective and growing control over the Panama Canal area."

Trump has complained that China exerts control over the canal and charges the U.S. ships six-figure premiums to cross Panama's isthmus. The canal was built over several decades by the U.S. and completed in 1914 but handed over to Panama during the Carter administration.

Immediately after Rubio’s fleeting visit to the central American country, President Mulino said Panama would not renew participation in China’s BRI and two Panamanian lawyers filed a complaint in the country’s Supreme Court to cancel the concession of Hutchison’s two ports on the canal. Mulino also ordered an audit into the company.

Mulino, after the talks with Rubio, dismissed any immediate threat of US retaliation and reiterated Panama’s ownership of the canal. He ruled out any negotiations with the US over the canal’s control. Chinese officials, on the other hand, have expressed that they have always respected Panama’s sovereignty and have no intention of infringing on it.

The BRI, launched by China in 2013, aims to build infrastructure and improve global trade. Panama was the first Latin American country to sign on to the initiative, and as part of the scheme, a two-party Chinese-led consortium is building a US$1.3 billion bridge over the waterway.

"The announcement by President Jose Raul Mulino that Panama will allow its participation in the CCP's Belt and Road Initiative to expire is a great step forward for US -Panama relations, a free Panama Canal, and another example of POTUS (President of the United States) leadership to protect our national security and deliver prosperity for the American people," Rubio posted on X after departing the country and hailing his visit as a “great success.”

Norman Castro, one of the lawyers in the case brought before the Supreme Court, told reporters the contract "violates what the constitution says in about 10 articles."

"After a detailed analysis of the contract... we decided that an action for unconstitutionality was the appropriate means" to challenge the concession," said Julio Macias, another lawyer behind the suit.

The complaint also accuses the Hong Kong subsidiary of not paying taxes and benefits due to a series of advantages that are allegedly against the law. So far, no evidence has been offered to back up the allegations, but it will be required for the courts. Time will tell.

There were also allegations of corruption which prompted Mulino to order an investigation into the company.

Such is the strength of the venom Rubio spews up to get his way. Hopefully, the Mulino investigations and court actions will reveal the truth: that Hutchison Ports is just a bona fide company, conducting its business in a respectful and peaceful way as it does with dozens of companies around the world.

The attack on Hutchison is nothing more but a show of sinophilia paranoia by the so-called most powerful man on Earth, Donald Trump, and lacky Marco Rubio. Together, they are stalking the world like a bull in a china shop, using bullying tactics to force the world leaders to their knees in a kowtow manner.

On his Truth Social network, Trump has also claimed – without proof – that Chinese soldiers have been deployed to the canal and that “Panama is, with great speed attempting to take down the 64 per cent of signs which are written in Chinese. “They are all over the Zone,” he said.

But the “Zone” – a former American enclave bordering the canal – hasn’t existed since 1979.
Prime US TV network CNN fact-checking Trumps usual blabberings said that if the scenario Trump describes sounds like the plot of a movie, well, it was. In the 2001 movie “The Tailor of Panama,” which starred Pierce Brosnan and Geoffrey Rush, the US invaded Panama after receiving bogus intelligence that China was trying to secretly buy the canal.

Mark Pinkstone

** The blog article is the sole responsibility of the author and does not represent the position of our company. **

Mark Pinkstone/Former Chief Information Officer of HK government

Is the proposed sale of the Cheung Kong Hutchison (CKH) shipping ports at either end of the Panama Canal an astute business deal or a bold political takeover? It can be argued both ways.

The Chinese side of the pendulum foresees doom as the sale would increase the US hegemony over global shipping because the sale includes not only Hutchison’s two shipping ports, but 80 per cent of all of Hutchison’s 43 ports world-wide. The intended principal buyer is BlackRock Inc., a major US financial and investment conglomerate.

The business side of the pendulum sees it as a major business deal worth US$23 billion.
The proposed sale drew the ire of China's Hong Kong and Macau Affairs Office (HKMAO), which reposted a Ta Kung Pao commentary criticising the CKH port deal with U.S. investment firm BlackRock as a betrayal of China, sending shares of CKH sharply lower on March 14.

The commentary said the U.S. would constrain China's maritime trade, and Chinese companies would face great risks in logistics and supply chains, impacting China's Belt and Road initiatives.
"This deal is an act of hegemony by the US, which uses its state power to infringe upon the legitimate rights and interests of other countries through despicable means such as coercion, pressure, and inducement," the commentary wrote.

"It is power politics packaged as a 'business behaviour'."

The in-principle agreement with the BlackRock-led consortium gave the two sides 145 days to hammer out specific terms and details before finalising the transaction, according to a Hong Kong Stock Exchange statement by CKH. Also, the deal will need to be approved by CK Hutchison’s shareholders, obtain approval from the Panamanian government, and meet unspecified customary terms agreed by the two sides, according to the statement “After the Panama Canal has been ‘Americanised’ and ‘politicised’, the US will definitely use it for political purposes and implement its own political agenda, and China’s shipping and trade here will certainly be subject to the US,” Ta Kung Pao wrote in a series of articles blasting the sale.

US president Trump announced immediately after his inauguration in January that he would “recover” the Panama Canal, which was owned by China. He was totally wrong. The Panama Canal is owned and operated by Panama, and the ports at each end are owned by Panama Ports Company, a subsidiary of Hutchison Port Holdings, a further subsidiary of CKH But it’s obvious that kicking China (via Hutchinson) out of Panama had been planned for some time.

Immediately after his inauguration, Trump sounded out potential buyers for the ports and had a meeting with BlackRock’s CEO Larry Fink in the White House. Fink is an old billionaire buddy of Trump. After that meeting, Trump sent his right-hand man, Secretary of State Marco Rubio, off to Panama to sort things out. And, by sheer coincidence, within a month, a deal was made for the sale of the ports.

Meanwhile, Reuters reported that Trump is planning an executive order to charge fees for China-linked vessels in the US. ports, in a bid to resuscitate American shipbuilding and disrupt China's supply chains.

But Li Ka Shing (96) retired, but still an advisor to the company, and his son Victor (60), now chairman of CKH, are businessmen like Trump. And a deal is a deal.

The disposal was primarily driven by an attractive valuation by wealth management firm Morningstar of the ports’ worth undertaken by CKH. Zerina Zeng and Zoey Zhou from debt research firm CreditSights, with offices in the US, UK, and Singapore, said. “CK Hutchison has a track record of recycling assets, and this is not the first time that Li and the conglomerate have faced criticism in the Chinese media, which we do not view as a major hurdle for deal completion,” they said.

The sale is understandable owing to its small returns compared with its role as a lightning rod of US-China tensions. The ports in Panama accounted for merely 1 per cent of CKH’s earnings before interest, taxes, depreciation, and amortisation, according to JPMorgan.

The sales proceeds will generate US$19 billion in cash for CKH, substantially higher than Morningstar’s US$10.5 billion valuation of its port assets. CKH’s shares surged by almost a quarter in intraday trading before closing 22 per cent higher at an 18-month record of HK$47.10 in Hong Kong. Its shares fell after the Chinese criticism later in the week.

But CKH has not totally abandoned its shipping business. After the proposed sale, CKH would still own stakes in four of the world’s 10 busiest container ports: Hong Kong’s Kwai Tsing port, Shenzhen’s Yantian port,Ningbo’s Beilun terminal, and the Mingdong and Pudong terminals in Shanghai.

However, it must be mindful of the words of China’s Foreign Ministry spokesperson Lin Jian when he said that the ministry supported Hong Kong companies in doing business overseas but “opposed any abuse of coercion and pressuring in international trade and economic relations.”
Hong Kong’s Chief Executive John Lee Ka-chiu concurred, adding: “The Hong Kong SAR government urges foreign governments to provide a fair and just environment for enterprises, including enterprises from Hong Kong.”