President Trump's claim that China controls the Panama Canal has placed a Hong Kong -Tycoon and his conglomerate in the heart of a confrontation between the United States and China.
That vast company, CK Hutchison Holdings, is one of Hong Kong's most valuable listed companies and has some of the world's largest investors as shareholders. One of the subsidiaries, Hutchison Ports, has been involved in the Panama Canal since 1997.
Of the five ports of Panama, Hutchison's are the largest – one to each end of the channel. According to the Panama Maritime Authority, the ports of Hutchison served ships with 39 percent of the freight containers that went through the channel last year, one of the world's most vital waterways. (The other ports are owned by a Taiwanese company, a Singaporean company and an American Panamanian joint venture.)
The role of the company brings unsolved questions for Washington to the surface about the influence of Beijing on Hong Kong, a special administrative region of China, which has become more pronounced in recent years. The Trump government argues that China could use its influence on a company in Hong Kong to force Panama to limit US trade in the port.
What is CK Hutchison, and who is this Tycoon?
The billionaire founder of CK Hutchison, Li Ka-Shing, is a legend in Hong Kong. A drop -out in high school, Mr. Li, now 96, changed a small company that sold plastic flowers in a realm of infrastructure, finance, retail and telecommunications.
Hutchison Ports, a subsidiary of CK Hutchison, whose shares are mentioned in Singapore, operates the ports Balboa and Cristóbal on the Pacific and Atlantic sides of the Panama Canal. The company employs 30,000 people and operates 53 ports in two dozen countries. The largest shareholders are BlackRock and Vanguard, two of the world's largest asset managers.
For decades until he retired in 2018, Mr Li led his company in a way that Chinese companies could not, and benefited from the free market of Hong Kong and various laws. Just like other entrepreneurs in Hong Kong, Mr. Li cultivated ties with the Chinese top leaders in Beijing and invested in China.
But in more recent years, Mr Li has sometimes spoken about the increasing grip of China on Hong Kong. In 2019, when pro-democracy protests were confronted with the police and Beijing at the elites of the city to fall into line, Mr Li called for the authorities to exercise restraint.
Since then, Mr Li has sold much of his property ownership in China and played some of his investments in Europe, a move that has made Chinese nationalists angry.
What does Hutchison -Poorten do in the Panama Canal?
Hutchison has operated the ports of Balboa and Cristóbal since 1997, when Panama granted a 25-year concession. It is the only port operator in which the Panamanian government is a shareholder and receives payments for container movements through the channel and dividends.
But the Hutchison concession to exploit its ports, which was renewed for another 25 years in 2021, is now questioning.
Panamanian authorities have promised to carry out an audit to verify that Hutchison “reports his income, payments and contributions to the State.” On January 21, almost a dozen auditors came in the offices of the company to start their work.
In addition, two lawyers in Panama have filed a lawsuit this week who challenges the country's contract with Hutchison and say that it has violated the Constitution of Panama. The Chinese government said on Wednesday that it “believes that Panama's government will offer an honest environment for companies, including those from Hong Kong.”
Hutchison -Poorten and his parent, CK Hutchison, did not respond to repeated requests for comments.
If CK Hutchison is in Hong Kong, why is it called Chinese?
That has to do with the unusual status of Hong Kong and its old companies such as CK Hutchison.
Hong Kong was ruled by Great Britain for a century and a half for a century and a half before it was returned to China in 1997. Beijing promised that it would make the city work with “a high degree of autonomy”. That changed in 2020 when Beijing imposed a national security law on Hong Kong after protests from pro-democracy burst into the city.
Beijing's tight control over Hong Kong has eradicated political opposition. Much of what made Hong Kong different from China, such as a lively social midfield and companies that can operate independently, has been eroded.
In his first term, Mr. Trump signed an executive order that overtaken a special indication in the context of American legislation so that the United States could treat Hong Kong differently than China about immigration and trade. During his term of office, President Joseph R. Biden Jr. the executive order.
In the meantime, authorities in Hong Kong have taken steps to indicate their loyalty to Beijing.
“Everything must be 'Hong Kong, China',” said David Webb, an old investor of Hong Kong. “It is not really surprising that companies in Hong Kong will be considered Chinese.”
What is the involvement of mainland China at Panama?
The concern of the Trump government about the influence of China in Panama is part of broader concerns about China's Belt and Road Initiative, a program that has financed and built infrastructure projects around the world. Panama, in 2017, became the first Latin -American country that joins Belt and Road.
After a visit this week by Marco Rubio, the American State Secretary, President José Raúl Mulino of Panama said that he would not renew the belt and road agreement. But Beijing has already scaled back the lending worldwide.
Panama received $ 669.7 million in subsidies and loan obligations from China, about half as much as the neighbor Costa Rica, according to Aiddata, a research project at William & Mary in Williamsburg, VA. The largest Chinese financing in Panama was a $ 200 million loan in 2019 from the state bank from the state bank from China to a private Panamanian bank.
China was planning to do more for Panama after a visit from his anniversary, Xi Jinping, in 2018. But the president of Panama who had led a tilt to Beijing, Juan Carlos Varela, left office in 2019.
Mary Triny Zea Contribution to reporting from Panama City, Annie Correal from Mexico -Stad, and Zixu Wang Van Hong Kong.
