Following US fears over Chinese control in the crucial delivery road, a Hong Kong-based company has agreed to sell its stakes in Panama to a partnership led by BlackRock Inc.
On Tuesday, CK Hutchison Holdings announced that it would seize all securities of Hutchison Port Holdings and Hutchison Port Group Holdings. Together, these two entities own 80 % of Hutchison Ports, which has 43 ships spread out across 23 nations.
BlackRock, Global Infrastructure Partners, and Terminal Investment Limited will receive a 90 % interest in Panama Ports Company, the operator of the Balboa and Cristobal ships as part of the transaction.
Worries about US surveillance and Chinese control
The price comes as a result of growing tensions regarding China’s involvement in the Panama Canal. In January, Sen. Ted Cruz warned that China’s access to the ports could allow it to “exploit or block passage” and create “acute risks for US national security.”
In February, Secretary of State Marco Rubio intensified the tension by telling Panama’s President José Raul Mulino that Chinese impact over the river must be restrained in order for US retaliation. Panama withdrew from China’s Belt and Road Initiative soon after, drawing condemnation from Beijing.
Trump’s strategy of regaining power
Authorities silently turned their attention to Hutchison Ports despite Trump’s administration’s public threat to reaffirm US control of the canal. The port operator had a 25-year no-bid improvement granted to the company, but a US-backed inspection revealed that the agreement was being reviewed.
There was growing rumors that a US company with close relationships to the White House was about to get over the biddership procedure and that one was about to take over. The most recent price suggests a proactive maneuver to prevent further US action.
With the agreement in place, British companies now have a majority stake in Panama’s leading ports, reshaping the balance of power along one of the world’s most important trade routes.
