China is scrutinising a deal struck by a Hong Kong company to sell ports at the Panama Canal to a United States financial firm.

Beijing directed multiple agencies on Tuesday to examine the transaction, according to Bloomberg News. The deal was earlier hailed by President Donald Trump, who has accused China of seeking to control the strategic waterway.

Recommended Stories

list of 4 itemsend of list

Hong Kong’s CK Hutchison said earlier this month that it had agreed to sell most of its global ports business worth $22.8bn, including assets near the Panama Canal, to a group led by US-based investment company BlackRock.

A week after the announcement, China’s Hong Kong and Macau Affairs Office reposted commentaries, calling the sale a betrayal of China that neglected national interests.

The deal, which is yet to be sealed, is now being investigated for security risks and antitrust violations on the orders of senior Chinese leaders, Bloomberg reported, citing unnamed sources.

A spokesperson for the Ministry of Foreign Affairs in Beijing said reporters should ask other Chinese authorities about the report.

Advertisement

“I would like to stress that in principle, China has been firmly opposing infringing on or undermining other countries’ legitimate rights and interests with economic coercion and bullying,” the spokesperson said.

Those words reflected earlier comments from Hong Kong’s leader John Lee.

“[The Hong Kong] government urges foreign governments to provide a fair and just environment for enterprises,” Lee told reporters. “We oppose the abusive use of coercion or bullying tactics in international economic and trade relations.”

Hutchison did not immediately respond to the reports of scrutiny by Beijing. The company has previously said the deal is “purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama Ports”.

The firm agreed to negotiations with the BlackRock consortium on an exclusive basis for 145 days according to a statement.

While the deal has not yet been finalised, it was not immediately clear what levers, if any, China could pull to block the deal, given the business that Hutchison is selling is based outside China and Hong Kong, and it is itself based in the Cayman Islands.

Trump has previously called for the Panama Canal to be removed from “Chinese control”. Numerous US politicians have criticised Hutchison’s operations at the Panama Canal as a security risk.