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The collapse of a proposed deal between U.S.-based BlackRock and Hong Kong’s CK Hutchison may lead to China gaining more influence over the Panama Canal, sparking tensions with Beijing.
The initial agreement would have transferred control of numerous international ports, including two in Panama, to a consortium involving BlackRock. Former President Donald Trump supported the deal, aiming to reduce Chinese influence over the canal and even suggesting the U.S. could “take back” the strategic waterway.
However, China opposed the deal and insisted that state-owned shipping giant Cosco be included in the transaction for a direct stake in the canal’s operations. This led to the collapse of the agreement.
CK Hutchison announced that the exclusive negotiation window with BlackRock had ended, but expressed willingness to reconfigure the deal to involve a major strategic investor from China in the consortium. Changes in the deal structure are needed for approval from relevant authorities.
An aerial view of cargo vessels at Balboa Port on the Panama Canal in Panama City. (REUTERS/Enea Lebrun/File Photo)
The original $23 billion deal involved transferring ownership of 43 ports across 23 countries, including the two critical Panamanian ports in Balboa and Cristobal. China’s growing infrastructure presence in Latin America has raised concerns in Washington.
Trump’s suggestion of reclaiming the Panama Canal highlights the ongoing debate surrounding China’s influence in the region. China may be excluded from the Panama port holdings but gain control of other assets in a larger deal.
Analysts predict that if the deal proceeds, Cosco could become the dominant global port owner and operator. This would align with China’s status as a major trading and manufacturing economy.
The failed Hutchison-BlackRock deal showcases the challenges faced by Hong Kong businesses under pressure from Beijing to prioritize national loyalty, even at the expense of Western partnerships.
Despite these developments, Panama maintains full sovereignty over the canal and asserts that Hutchison’s operation of the port facilities does not grant China any influence over canal operations.
