A company based in Hong Kong is selling most of its stake in two important ports on the Panama Canal. This sale is being led by BlackRock, a major American investment firm.
This move follows recent comments from former President Donald Trump, who has expressed concerns about Chinese control over the canal. He believes the U.S. should have more influence over this crucial shipping route.
CK Hutchison Holding operates these ports through a subsidiary. They manage the Atlantic and Pacific entrances to the canal and have been doing so since 1997. The deal for the ports is valued at $22.8 billion.
While CK Hutchison is not owned by the Chinese government, its Hong Kong base means it adheres to Chinese financial regulations. The deal involves 43 ports in 23 different countries, and it still needs approval from the Panamanian government.
The Panama Canal is a vital 51-mile (82 km) waterway that connects the Atlantic and Pacific Oceans. Each year, approximately 14,000 ships pass through, transporting goods such as cars, natural gas, and military supplies. The canal was constructed in the early 1900s and remained under U.S. control until 1977, when treaties began to transfer control back to Panama. By 1999, Panama had full control of the canal.
Trump has made several arguments for the U.S. to reclaim control over the canal. He claims that Chinese influence could pose a national security risk and that the U.S. should not be charged excessively for using the canal, especially given its financial investment during the canal’s construction.
In a visit to Panama, U.S. Secretary of State Marco Rubio urged the Panamanian government to make “immediate changes” regarding China’s influence in the area. However, Panama’s President, Jose Raul Mulino, has firmly stated that the canal remains under Panamanian control.
Frank Sixt, from CK Hutchison, emphasized that the sale is strictly a business decision and unrelated to ongoing political discussions. BlackRock, along with Swiss company Terminal Investment Limited, is part of the group buying the ports.
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