1 word to unpack Hutchison’s exit from Panama and other ports: geopolitics

CK Hutchison Holdings’ decision to sell its port operations in the Panama Canal and elsewhere was aimed at mitigating geopolitical risks even though the conglomerate framed the deal as a purely commercial move, analysts and sources have said, as they urged Hong Kong’s other major companies to also prepare for unparalleled uncertainties.

The company founded by Hong Kong tycoon Li Ka-shing caught markets off guard when it announced late on Tuesday it was selling 80 per cent of Hutchison Port Group, a subsidiary that owns 43 container ports in 23 countries, including a 90 per cent stake in the Balboa and Cristobal docks at either end of the Panama Canal.

Hutchison will retain control of its docks in China, including in Hong Kong.

In a congressional address, US President Donald Trump hailed the deal led by American investment firm BlackRock after repeatedly expressing his desire to take control of the canal since January, arguing that Hutchison’s role enabled Beijing to profit and presented a threat to the country’s security and commercial interests.

Earlier in the week, Trump also doubled tariffs on all Chinese imports to 20 per cent, triggering retaliatory measures by Beijing.

After the US president raised his concerns, Panamanian authorities launched an audit of Panama Ports Company, a subsidiary of Hutchison Port Group, which has been running the two ports since 1997. The firm was also taken to court over its port contract.