Chinese authorities will check the deal on the sale of Panama ports to US companies

The Chinese State Administration for Market Regulation (SAMR) has decided to verify the sale by the Hong Kong company CK Hutchison of two ports of the Panama Canal (Balboa and Cristobal) to a consortium of American investors led by BlackRock. The regulator stated this in response to a request from the Hong Kong publication Ta Kung Pao, publishing a message on its website.

"We have paid attention to this transaction and will conduct an audit in accordance with the law to protect fair competition in the market and protect public interests," the statement quoted the head of the second antimonopoly department of SAMR.

A Financial Times source familiar with the regulator's work said that the agency is collecting information and is preparing to launch an investigation next week. According to him, SAMR is assessing whether the deal will violate the rules and limit competition in China's domestic shipping market and in the international freight market.

Two FT interlocutors familiar with the matter said that the regulator had consulted at least one industry expert to work on this case, who proposed introducing conditions for the purchase of ports to ensure that the deal would not weaken the competitiveness of Chinese shipping companies and cargo owners.

Newspaper sources familiar with the situation note that the Panamanian ports account for "only a small part" of the transaction amount, which also includes ports in Europe, Southeast Asia and the The Middle East. It is not yet clear whether the Chinese regulator intends to check the entire deal or focus only on the Panama Canal ports, the FT notes.

According to the interlocutors of the newspaper, currently the official signing of the deal, scheduled for April 2, has been postponed. Negotiations between the parties are continuing, but both are preparing for a possible revision of the deal, says one of the sources.

The interlocutors of the newspaper are wondering about the intentions of SAMR.

"Is this a warning shot for others or an attempt to disrupt the deal?" — said one of them.

Another emphasizes that the deal will have "implications for Hong Kong as a financial center."

FT notes that C.K. Hutchison is also under the scrutiny of Panama's Auditor General Anel Flores, who said that his office is "working hard" to complete the audit of two Panamanian port concessions.

As part of the audit, the Hong Kong company's compliance with the terms of the 25-year port concession, which was signed in 1997 and extended for the same period in 2021, is being verified. She attracted the attention of the Panamanian authorities because of the "relatively low return" that the concession brings to the state, the newspaper writes.

US President Donald Trump, after being elected president, said that Washington could demand the return of the Panama Canal under its control if the current conditions for its use were not revised — he pointed to high tariffs for American ships. The United States participated in the construction of the canal in the first half of the twentieth century, the facility was transferred to Panama in 1977 and completely came under the control of the country's authorities in 1999.

Trump also noted the influence of China in the management of the channel. After the claims of the head of the White House, Panama refused to extend the memorandum of understanding with China on the One Way initiative.

The US State Department, after talks between Secretary of State Marco Rubio and Panamanian President Jose Raul Mulino, announced that the republic had canceled the fee for the passage of American ships through the Panama Canal. However, the administration of the channel itself denied this.

In early March, it became known that a consortium of investors from the United States, led by BlackRock, would buy a controlling stake in the ports of the Panama Canal from C.K. Hutchinson. The deal, in addition to the two Panamanian ports, includes more than 40 other ports around the world and is estimated at $ 22.8 billion, RBC reminds.