CK Hutchison, a major conglomerate in Hong Kong, recently announced its plans to sell its stake in two ports on the Panama Canal to a group of US investors led by BlackRock. This decision is part of a $22.8 billion megadeal that would give the consortium control over more than 40 ports in 23 countries. The announcement came after complaints from US President Donald Trump about Chinese control over the key shipping route.
Following the news of the deal on March 4, CK Hutchison’s shares surged, but they plummeted less than two weeks later when a Chinese state-run newspaper in Hong Kong, Ta Kung Pao, accused the company of betraying and selling out the Chinese people.
As the April 2 deadline to sign the deal approaches, CK Hutchison finds itself under scrutiny from both Washington and Beijing. The proposed sale has also brought to light the longstanding tensions between Beijing and CK Hutchison, as well as its founder, Li Ka-shing.
Li, a billionaire with a mythical rise from a mainland Chinese-born refugee to a Hong Kong real estate tycoon, had close relationships with Chinese leaders Deng Xiaoping and Jiang Zemin. However, his political influence diminished after Xi Jinping took office in 2012.
In 2015, Li raised eyebrows by restructuring his business interests and registering them in the Cayman Islands. He also began divesting from China around the same time. In 2018, Li handed control of his company to his son, Victor, but he remains in the public eye. In the following year, Li’s ambiguous comments regarding Hong Kong’s mass pro-democracy protests caused frustration among pro-Beijing commentators, especially as other companies in the city openly criticized the demonstrations. While opinions vary among analysts on whether the Li family quietly supported calls for democracy in Hong Kong, there is a general consensus that they are not as overtly pro-Beijing as many other business dynasties in the city.
Wilson Chan, co-founder and director of policy research at Hong Kong’s Pagoda Institute, highlighted that compared to other family offices of his generation, such as the Fok and Pao family or the Tung family, who have strong ties to mainland China and politics, Li and his sons prefer to position themselves as global business investors who keep a distance from politics.
Despite concerns, some experts believe that Beijing may struggle to intervene in the sale of ports due to legal jurisdiction issues. An antitrust investigation could potentially act as a deterrent, but Chinese regulators typically do not interfere with Hong Kong business deals unless there are legal violations.
Martina Fuchs, a business correspondent for the Chinese state-run Xinhua News Agency, predicts that the deal may face delays or cancellation due to increasing politicization. With China’s strategic interests in the region and pressure from US President Donald Trump to limit China’s influence, the situation has become highly complex.
Beijing could exert pressure on CK Hutchison through its affiliate companies and business interests in mainland China. Despite reducing investments in China, CK Hutchison still generates a significant portion of its revenue from the country, making it vulnerable to Beijing’s influence. Foreign and local companies in Hong Kong are closely monitoring the situation to see how it unfolds.