The heartburn President-elect Donald Trump inflicted on China's Xi Jinping with his Christmas greeting is not getting any better:
Merry Christmas to all, including to the wonderful soldiers of China, who are lovingly, but illegally, operating the Panama Canal (where we lost 38,000 people in its building 110 years ago), always making certain that the United States puts in Billions of Dollars in “repair” money, but will have absolutely nothing to say about “anything.”
The communist government in Beijing has put a hold on the sale of two Panama Canals ports by a Hong Kong-based conglomerate to a group led by U.S. investing giant BlackRock.On March 4, CK Hutchison, controlled by Hong Kong billionaire Li Ka-Shing, announced plans to sell 43 port facilities globally — including critical ports at both ends of the Panama Canal and near the Suez Canal — for approximately $22.8 billion.
But China’s State Administration for Market Regulation effectively stalled the deal by initiating an investigation on Friday into potential violations of Chinese anti-monopoly laws.
Chinese Communist Party leader Xi Jinping was reportedly livid after the deal was announced as he had been planning to use the Panama port issue as a bargaining chip in negotiations with the Trump Administration.
Related: Who needs the Panama Canal? 1997
The deal called for an agreement to be signed by April 2, though it now is likely that the Wednesday deadline will be missed.
“We are confident that Panama will require the sale of these assets within its sovereign territory,” a White House official told the New York Post.
U.S. State Department spokeswoman Tammy Bruce said of China’s pushback: “It’s no surprise that the CCP is upset at this acquisition, which will reduce their control over the Panama Canal area.”
The full deal involves CK Hutchison selling 90 percent of its Hutchison Ports business, encompassing 43 ports across 23 countries. This includes the two critical Panama Canal terminals, originally granted to the company in 1998 and renewed for another 25 years in 2021.
"The stakes are enormous for all parties involved," Joseph Curl wrote in a March 31 analysis for the New York Sun. "CK Hutchison could walk away with a whopping $19 billion in cash if the transaction proceeds. Meanwhile, Beijing has made it clear that major Chinese business divestments involving American companies are now under its political microscope — something analysts predict will only intensify."
Xi directed several Chinese authorities, including the State Administration for Market Regulation and the Ministry of Commerce, to study the deal with the aim of reviewing what Beijing can do to block it, the Wall Street Journal reported on March 18, citing a person familiar with the matter.
"The deal puts Xi in a tricky position," the Journal's report said. "On one hand, Beijing has had to make clear its anger over the Hong Kong company’s move, which came without advance notice, to protect Xi’s strongman image, the people close to decision-making said. On the other, they said, Beijing is aware that any significant effort to torpedo the deal risks escalating tensions with the Trump Administration. So far, China has been relatively restrained in its retaliation against Trump’s new tariffs on China, suggesting its desire to keep tensions under control."
Last week, a vice minister of a Communist Party agency traditionally charged with building ties with other Communist states led a delegation to Panama aimed at deepening relations, according to the official Xinhua News Agency. “Beijing knows it isn’t in a strong position right now, so it sent a low-level delegation to Panama,” one of the people said.
President Donald Trump touted the CK Hutchison-BlackRock deal in his State of the Union address to Congress. “My administration will be reclaiming the Panama Canal, and we’ve already started doing it,” he said.
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