Political pressure is mounting over a plan by a Hong Kong conglomerate to sell its Panama ports to BlackRock, the American investor, raising questions about the future of the $19 billion deal.
John Lee, the leader of Hong Kong, added his voice on Tuesday to escalating warnings from China, saying the transaction deserved “serious attention.”
The deal between CK Hutchison, one of Hong Kong’s most successful conglomerates, and BlackRock, the world’s biggest asset manager, was seen by investors as a solution to a geopolitical hot potato that began with a claim by President Trump that CK Hutchison’s ownership of two major ports on either end of the Panama Canal was an issue of national security because it was “operated by China.” Mr. Trump praised the BlackRock deal after it was announced.
Now, that solution is starting to look more like a problem. Shares in CK Hutchison, which is controlled by one of Hong Kong’s richest people, Li Ka-shing, fell nearly 3 percent on Tuesday after Mr. Lee’s comments. The company has canceled press and investor briefings that were scheduled for this week when it releases its latest financial report. Hutchison did not respond to requests for comment.
China has criticized the planned port deal, which would result in CK Hutchison selling most of its Hutchison Port Holdings, including its Panama ports and over 40 other global ports. A series of commentaries published in Ta Kung Pao, a Hong Kong newspaper owned by the Hong Kong government and Communist Party, argued that the Hutchison-BlackRock arrangement would allow the United States to “use it for political purposes and promote its own political agenda,” in turn making Chinese shipping and trade “subject to the United States.”
On Tuesday, Hong Kong’s Mr. Lee said that “any transaction must comply with the legal and regulatory requirements.” Speaking at a weekly press briefing, he said that the government would “handle it in accordance with the law and regulations.”
He did not elaborate, but legal experts said that, historically, mergers or acquisitions undertaken by Hong Kong companies and foreign ones have not had to seek the kind of regulatory approval Mr. Lee was potentially referring to.
It is not clear what, if anything, the Hong Kong authorities could do to stop the deal. By contrast, Chinese companies often must secure permission from the Ministry of Commerce, the State Administration of Foreign Exchange and other regulators to sell assets or move money out of mainland China.
But the warnings have raised concerns among some in the financial community about the politicization of business in Hong Kong, a former British colony that was returned to Beijing in 1997 under the promise that it would operate with “a high degree of autonomy.” This pledge changed in 2020 when Beijing imposed a national security law on the city to quash pro-democracy protests.
While Mr. Lee’s government has repeatedly emphasized that Hong Kong remains an open place to do business and a global financial hub with laws separate from the rest of China, some critics have pointed out that its government is under pressure from Beijing.
But amid rising animosity between the United States and China, and the global uncertainty caused by President Trump’s trade policies, deal making involving Hong Kong companies has become more politicized.
The deal between CK Hutichison and BlackRock can “no longer be seen as purely commercial in nature,” said Wang Xiangwei, an associate professor of journalism at Hong Kong Baptist University.
“Let’s do a reverse and say BlackRock announced it was going to sell its ports to Cheung Kong in Hong Kong,” Mr. Wang said, referring to CK Hutchison’s former name. “I would imagine that Trump would write angry tweets on Truth Social condemning the deal,” he added. “In Congress, I’m certain lawmakers would make noises and launch a congressional investigation into this deal, too.”
On Tuesday, Mr. Lee also added to the criticism from Beijing over the Trump administration’s threats of tariffs, saying that the Hong Kong government urged other countries to provide a level playing field for companies. Using similar language to the Chinese government in its own statements on the subject, he added, “we oppose the abusive use of coercion or bullying tactics in international economic and trade relations.”
