Why did the sale of the Panamanian port controlled by Hong Kong's CK Hutchison Holdings turn into a fierce confrontation between China and the United States? What changes have occurred since Chinese regulators intervened in late March? How will this matter develop in the future?

According to a report by Guanchazhe on December 17, the U.S. media outlet The Wall Street Journal reported that in the Panamanian port transaction led by BlackRock Group, the latest requirement from China is that China Ocean Shipping Group (COSCO) must obtain majority control.

The U.S. media claims that "this transaction has angered the Chinese side." According to sources, the initial Chinese requirement was for COSCO to participate in the transaction as an equal partner. However, now it must be allowed to obtain a majority stake, otherwise the transaction will not be approved. Sources also said that China has informed all relevant parties that if COSCO is excluded from the transaction, China will take measures to block CK Hutchison's sale plan.

Port of Balboa operated by CK Hutchison

BlackRock Group and Mediterranean Shipping Company (MSC) believe that China's requirement for majority control and veto power over port operations is "unacceptable," and the White House also claimed it could not accept it. According to people involved in negotiations, the transaction is currently at an impasse.

Frankly speaking, China's warning is not a joke, and it is very worth the parties involved in the port transaction to think carefully about. CK Hutchison needs no further explanation, BlackRock Group has considerable business interests in China, and MSC also has massive shipping operations in China. Continuing to confront China would have consequences that they themselves are well aware of.

Even stepping back, a prolonged stalemate is not beneficial to any party involved, especially BlackRock Group and MSC. Since China has the confidence to raise its requirements, continuing to oppose may result in China raising them again.

BlackRock Group

BlackRock Group and MSC should understand that the initial conditions set by China were definitely the most favorable ones, but if they are not accepted, they can only accept higher conditions, and this cycle will continue until they agree to accept them.

The fundamental reason why the Chinese regulatory authorities got involved in the sale of the Panamanian port by CK Hutchison is that this is not just a simple commercial transaction, but involves China's strategic interests. If not intervened in time, future developments could severely damage China's interests.

Put simply, although this seems like a routine commercial transaction, considering the importance of the Panama Canal, the intensity of the Sino-U.S. rivalry, and the special nature of BlackRock Group serving the U.S. government, this transaction has actually become a geopolitical game.

Panama Canal

If BlackRock Group gains control of the Panama Canal port, it would be equivalent to blocking China's throat at a key node in global maritime trade. If they cooperate with the U.S. government's policies to contain China and refuse to allow Chinese ships to dock at the port, it would cause great trouble for China.

Just like the U.S. previously announced so-called "port fees" for Chinese vessels, the purpose was to suppress China's shipping capacity. This pressure would be transmitted back to manufacturing, inevitably threatening China's economic development. Similarly, refusing to allow Chinese ships to dock at the port would have the same effect.

Previous examples have shown that the so-called "free trade" that the West always proclaims is merely a slogan. At necessary times, any component of "free trade" could become a tool to suppress other countries. This is why the Chinese regulatory authorities had to intervene in the transaction. If CK Hutchison were allowed to act recklessly, the ports of the Panama Canal would certainly be politicized and used as a tool to contain China.

Sino-U.S. Relations

In the current stage of intensifying Sino-U.S. rivalry, any matter that could potentially become a tool for the U.S. to contain China needs to be taken seriously by China. This is not paranoia, but rather a proactive measure.

Original article: toutiao.com/article/7584747691503010347/

Statement: This article represents the personal views of the author.