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By Micah McCartney
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Panama has taken control of two ports at either end of the Panama Canal from Hong Kong conglomerate CK Hutchison after the country’s Supreme Court annulled the concession, ruling it unconstitutional.
"The relevant enterprise has made a statement that it will retain its claim of any rights including resorting to legal procedures," Chinese Foreign Ministry spokesperson Mao Ning told reporters Friday. "China will firmly safeguard the lawful rights and interests of enterprises."
Newsweek reached out to Panama’s Foreign Ministry by email with a request for comment outside of office hours.
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Why It Matters
On January 29, Panama’s Supreme Court voided the lease concession held by CK Hutchison subsidiary Panama Ports Company (PPC) for the terminals of Cristóbal and Balboa. The ruling followed pressure from President Donald Trump, who shortly after taking office last year railed against China's influence in the Western Hemisphere and over the canal in particular, vowing to "take it back." Both Panama and China have repeatedly denied that Beijing exerts control over the waterway.
Washington handed over the 50-mile canal to Panama in 1999. Roughly 70 percent of cargo transiting the canal is destined for or originates in the United States.
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What To Know
The Panamanian government entered the terminals and assumed administrative and operational control, the Panama Maritime Authority said in a decree Monday. Authorities appointed APM Terminals, a subsidiary of Danish shipping firm Maersk, as interim operator.
PPC was first granted the concessions in 1997, and its contract was extended in 2021 before being annulled.
"The takeover of the two terminals reflects the culmination of a campaign by the Panama State against PPC and the concession contract over the past year," CK Hutchison said in a Tuesday statement. The company said Panamanian authorities ordered the "occupation" of all movable property and arrived without invitation to remove PPC employees from the terminals.
"CKHH considers the ruling, the Executive Decree, the purported termination of PPC’s concession, and the takeover of the terminals to be unlawful," the statement said, adding the firm would continue consulting legal advisers on domestic and international avenues of recourse.
China’s office for Hong Kong and Macao affairs has called the court ruling a breach of trust, warned that Panama would "pay a heavy price" and ordered state-owned enterprises to suspend plans for new projects in the country in retaliation.
What Happens Next
Cristóbal and Balboa are among 41 port projects worldwide that CK Hutchison agreed to sell its majority stakes in to a consortium led by U.S. investment firm BlackRock under a $22.8 billion deal hammered out last year amid U.S. pressure. However, the agreement remains in limbo pending approval from the Chinese government.
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