Panama’s Supreme Court has invalidated a concession allowing CK Hutchison, a Hong Kong-based company, to operate ports at both ends of the Panama Canal. The decision follows an audit that raised concerns about irregularities in a 25-year extension approved in 2021, setting off strong reactions from Hong Kong and international observers.
Hong Kong Condemns Ruling
On Friday, Hong Kong’s government issued a forceful statement rejecting the court’s decision. It said the ruling “strongly opposes any foreign government using coercive, repressive or other unreasonable means in international economic and trade relations” and warned that such actions harm the legitimate business interests of Hong Kong enterprises. Officials emphasized that the decision undermines confidence in fair international trade.
Geopolitics at Play
The move has wider strategic implications. The United States has long been concerned about Chinese influence over the Panama Canal, viewing port operations as a matter of national security. Despite assurances from Panama’s government and the canal authority that China has no role in operations, the court’s decision aligns with Washington’s interest in limiting Beijing’s presence. Panama was also the first overseas stop for US Secretary of State Marco Rubio, highlighting the canal’s geopolitical significance. President Donald Trump previously suggested the canal should be returned to US control.
The court’s brief statement did not clarify what will happen to the ports next, leaving the future of operations uncertain.
CK Hutchison Faces Legal and Political Challenges
Panama Ports Company, the subsidiary operating the ports, said it had not been formally notified of the ruling. It defended its concession as the result of transparent international bidding and said the decision “lacks legal basis” while threatening the livelihoods of thousands of Panamanians who depend on port activity. The company stated it reserves the right to pursue legal remedies in Panama or elsewhere.
The situation is further complicated by a stalled sale announced last year, in which CK Hutchison planned to sell its majority stake in Panamanian ports and other global holdings to a consortium including BlackRock. Objections from Beijing reportedly slowed the transaction, leading the company to consider inviting a Chinese investor to join the consortium—a move seen as an attempt to ease political pressure.
The episode highlights the delicate position Hong Kong business leaders face as they balance global operations with Beijing’s expectations, especially amid strained China-US relations.
