There’s nothing China can do directly about the Panama port sale. That doesn’t mean they can’t force the Hong Kong based company selling the Pooh Bear’s honey behind his back to cancel the deal. Xi Jinping hasn’t stopped ranting since he heard the transaction reached the “agreement in principle” stage. It’s nothing but “spineless groveling” to Donald Trump and a “betrayal” of the Chinese people, Xi rages.
Panama port sale
China is making a huge fuss about “a proposal to sell ports in the Panama Canal to American asset management giant BlackRock.”
China’s Hong Kong and Macao Affairs Office re-posted “a commentary published by the state-owned Ta Kung Pao newspaper” about the deal on Thursday, March 13. The op-ed attacked the move as “spineless groveling” and a “betrayal” of the Chinese people.
The news sent CK Hutchison stock shares plummeting in price “by more than 6% on Friday.” They’re the current owners of two ports at either end of the Panama Canal.
Insiders relate that it’s a clear sign “that some investors are concerned the deal may not ultimately go through.” Beijing could “strenuously” object.
A senior equity analyst for Morningstar, Dan Baker, explained the current situation. “I’m not aware that any approval from Chinese regulators is required given CKH is retaining all of its existing Chinese ports.”
Even so, Panama is a key element to Xi Jinping’s “belt and road” scheme. “Of course, there is some chance that other influences may be brought to bear on the company that might put the deal at risk. The market seems to be pricing in some chance of this.”
Agreement in principle
Until the Pooh Bear started flying off the handle, everyone else in the world was considering the Panama port sale a done deal. A “group of investors led by BlackRock said it would spend $22.8 billion to buy the ports of Balboa and Cristobal on either end of the canal from CK Hutchison.”
To sweeten the deal, “the consortium also agreed to buy CK Hutchison’s controlling interest in 43 other ports comprising 199 berths in 23 countries.” Hutchinson saw nothing but dollar signs and instantly nailed down the contract. That was before China accused them of “profit-seeking” and “disregarding national interests and national justice.” Along with “betraying and selling out all Chinese people.”
If ownership of those two ports doesn’t change hands through a sale, President Donald Trump has made it crystal clear that he’ll seize them by force.
The deal giving control of the canal to Panama included terms compelling “neutrality” of it’s use. Hong Kong was clearly used by China as a “cut out” to disguise their ability to snarl any shipping they don’t want to travel through the canal any time they want.
CK Hutchison is “a global conglomerate backed by Li Ka-shing, long famed for being one of Hong Kong’s savviest investors.” He saw the port sale as a way “to get rid of a political hot potato while fetching a good price from BlackRock and company.” He doesn’t care about Panama as much as he cares about his bank balance. The group expects “to receive cash proceeds of more than $19 billion from the sale, an amount well above what analysts estimated the ports were worth.”
China issued them a warning. “Faced with such a major event and a matter of great justice, the relevant company should think twice.” Panama is really important to Pooh. “And think carefully about what position and side it should stand on.“
