Hong Kong's richest man is in hot water over his company's Panama Canal
ports deal
[March 20, 2025] By
KANIS LEUNG
HONG KONG (AP) — Hong Kong tycoon Li Ka-shing’s business empire is in
the crosshairs after CK Hutchison Holdings chose to sell its Panama
Canal port assets to a consortium that includes U.S. investment firm
BlackRock Inc., apparently angering Beijing.
Over the past week, Beijing's Hong Kong affairs offices have posted
scathing commentaries from a local state-backed media outlet over the
tentative deal by Hutchison, which is controlled by Li’s family.
That raises questions about the deal and highlights the difficulties
Hong Kong businesses face as they balance demands from Beijing for
national loyalty and their own capitalist interests in the once
free-wheeling Asian financial hub. Here's what to know about the issue.
Hong Kong’s richest tycoon
Nicknamed “Superman,” Li is among the world’s 50 richest people, with
Forbes calculating his net worth at $38 billion. Li, 96, retired from
his position as chairman of CK Hutchison in 2018, succeeded by his elder
son Victor. But he's still one of Hong Kong's most influential figures.
Li's rags-to-riches story paralleled the former British colony’s rise.
His business empire touches almost every aspect of daily life in Hong
Kong, from properties and supermarkets to telecommunications and
utilities. Globally, his conglomerate owns assets including British
drugstore chain Superdrug and European mobile phone network operator
Three.
A Hutchison subsidiary has operated ports at both ends of the Panama
Canal since 1997. That was one reason U.S. President Donald Trump has
alleged Chinese interference with the critical shipping lane's
operations.
Li's ties with Beijing
Li’s influence extends beyond business. He has met with top Chinese
leaders and has served on the elite committee that selected Hong Kong’s
leader.
Experts on ties between Beijing and Hong Kong said ruling Communist
Party leaders once understood that support from the business sector was
crucial for maintaining Hong Kong’s capitalist system. It has been
strategically vital for mainland China’s economy, given the role their
global networks and resources play in the country’s development. So, Li
has had notable political influence.
But Li has faced criticism over some business decisions. When he sold
off some mainland Chinese assets in 2015, an article published by a
think tank affiliated with Chinese official news agency Xinhua accused
him of being immoral.
During pro-democracy protests in 2019, Li was blasted by some
pro-Beijing supporters for his perceived ambivalence about the unrest.
Some other Hong Kong business leaders adopted a harsher stance.
Panama ports deal
CK Hutchison announced March 4 that it would sell all its shares in
Hutchison Port Holdings and in Hutchison Port Group Holdings to the
consortium that also includes BlackRock subsidiary Global Infrastructure
Partners and Terminal Investment Limited, which is chaired by Italian
shipping scion Diego Aponte, whose family reportedly has a longstanding
relationship with Li’s.
If approved, the deal, valued at nearly $23 billion including $5 billion
in debt, will give the consortium control over 43 ports in 23 countries,
including the ports of Balboa and Cristobal, located at either end of
the canal. The transaction does not include ports in Hong Kong or
mainland China. CK Hutchison said the transaction was purely commercial
in nature.
The deal pleased Trump but angered Beijing.
One of the Beijing-backed newspaper commentaries described the deal as a
betrayal of all Chinese and said the company should think about which
side to take. The other said great entrepreneurs are patriots,
suggesting that businesspeople who “dance with” predatory American
politicians would be doomed to infamy.
Comments on popular posts about the deal on Chinese social media
platform Weibo tend to be more critical than favorable toward Li.
[to top of second column] |
Hong Kong tycoon Li Ka-shing, chairman of CK Hutchison Holdings
company, waves to media after the company's Annual General Meeting
in Hong Kong, May 10, 2018. (AP Photo/Kin Cheung, File)
 Chief Executive John Lee avoided
direct criticism of the deal or Trump, but told reporters on Tuesday
his government opposes bullying tactics in international economic
and trade relations, reiterating Beijing's stance.
Ports carry geopolitical value
Some unconfirmed reports have suggested Chinese leaders were angry
not to have been consulted in advance about the deal.
George Chen, managing director for Hong Kong at The Asia Group, a
Washington-headquartered business and policy consulting firm, said
Beijing may have been disappointed because it had almost no time to
devise a response in advance.
Ports are valuable strategic assets and transactions involving them
are always sensitive, said Wilson Chan, co-founder of the Pagoda
Institute, a think tank focusing on public policy and the global
political economy.
It is unclear whether pressure from Beijing will affect the deal,
which has to be approved by Panama's government. China’s Foreign
Ministry deflected a question about whether authorities are
investigating the deal, saying reporters should ask other
authorities.
Cancelling the deal would be risky, Chan said.
“Strictly speaking, you just let Trump take credit for it, then you
later say ‘Sorry, I’m canceling the deal.’ You can imagine what
Trump’s reaction would be,” he said, adding that would also affect
how the outside world views Hong Kong businesses.
CK Hutchison has not commented on the controversy.
The company reported its 2024 financial results on Thursday, but did
not hold a news conference. Victor Li did not mention the deal in
his chairman’s statement but said the operating environment for the
group’s business is expected to be volatile and unpredictable. He
said he anticipated potential headwinds for the company’s ports and
related services in early 2025 as shipping lines transition into
their new alliances and ongoing geopolitical risk impacts global
trade.
Longer term implications
The first Trump administration sanctioned Chinese and Hong Kong
officials for undermining the autonomy of the territory promised
when Britain handed its colony to Beijing in 1997 under a concept
dubbed “One country, two systems.” It promised the city could keep
its Western-style civil liberties and economic autonomy for at least
50 years, but following the 2019 protests, Beijing has doubled-down
on its political control of the city.
Li could try to placate critics who deem him insufficiently
patriotic, Chan said, by using proceeds from selling the port assets
for investments aligned with Beijing’s policies, particularly in
developing Hong Kong and mainland port businesses.
But relations between private businesses and Beijing remain
uncertain, said The Asia Group's Chen. Even though Chinese President
Xi Jinping recently met with private sector business leaders in a
show of support, some may wonder if they must follow the party line
even if that might conflict with their business interests, he said.
If Beijing steps up pressure on Li to scrap the deal, the Trump
administration could hit back with more sanctions and restrictions
on Hong Kong and Chinese businesses and some individuals, he said.
The situation shows that Washington’s concerns about Hong Kong's
business autonomy are valid, Chen said.
“This is bad when it comes to the defense of ‘one country, two
systems,’” Chen said.
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