Panama’s Supreme Court has nullified a concession allowing Hong Kong-based CK Hutchison to operate ports at both ends of the Panama Canal, following an audit that flagged irregularities in a 25-year extension approved in 2021. The decision has drawn strong condemnation from Hong Kong and raised concerns over the future of one of the world’s most strategic waterways.
Hong Kong Condemns Ruling
On Friday, Hong Kong’s government issued a statement saying it “firmly rejects” the court’s decision. Officials argued that the ruling undermines legitimate business interests and criticized the use of coercive or unreasonable measures by foreign governments in trade and economic relations. The government stressed that such actions could threaten the confidence of international investors in Hong Kong enterprises.
Geopolitical Implications
The ruling has wider geopolitical consequences. The United States has long viewed Chinese influence over the Panama Canal as a strategic concern. While Panama’s government insists China has no role in canal operations, US officials—including Secretary of State Marco Rubio—have treated the ports as a national security issue. The court’s decision aligns with Washington’s longstanding aim of limiting Chinese involvement in the canal, a position even supported by former President Donald Trump, who suggested Panama should return control of the canal to the US.
The court provided no clarity on what will happen next with port operations, leaving the future uncertain.
CK Hutchison Faces Legal and Political Hurdles
Panama Ports Company, the CK Hutchison subsidiary that runs the ports, said it had not been formally notified of the ruling. The company defended its concession as the result of transparent international bidding and warned that the decision threatens both its contract and the livelihoods of thousands of Panamanians dependent on port activity. It stated that it reserves the right to take legal action in Panama or abroad.
The controversy is compounded by a stalled sale announced last year, in which CK Hutchison planned to sell its majority stake in the Panamanian ports and other global assets to an international consortium including BlackRock. Objections from Beijing reportedly slowed the deal, prompting the company to consider inviting a Chinese investor to join the consortium—a move seen by some as an attempt to appease Beijing.
The episode highlights the difficult position Hong Kong business leaders face as they navigate international commercial interests while managing Beijing’s expectations, particularly amid rising tensions between China and the United States.
