Critics Target CK Hutchison’s Ports Sale

(Reuters) – Beijing’s criticism of Hong Kong conglomerate CK Hutchison’s move to sell its ports business signals rising political scrutiny over Chinese business divestments involving American buyers, analysts say.

The critique, particularly focused on the sale of assets near the Panama Canal to a BlackRock-led consortium, is expected to intensify scrutiny over a potential sale of TikTok’s U.S. assets, owned by Chinese firm ByteDance.

U.S. President Donald Trump praised the deal soon after its announcement on March 4, labeling it as the ‘reclaiming’ of the canal. However, a week later, China’s Hong Kong and Macau Affairs Office reposted criticisms of CK Hutchison, calling the sale a betrayal of Chinese national interests.

Chinese regulators, acting on central leadership directives, have initiated investigations into the deal, demonstrating Beijing’s dissatisfaction with CK Hutchison’s divestment under perceived U.S. pressure. One source requested anonymity due to the matter’s sensitivity, as the State Council Information Office (SCIO) did not respond to inquiries.

CK Hutchison’s earnings statement made no mention of the ports deal, though it acknowledged the significant rise in geopolitical and trade tensions.

The politicization of both the CK Hutchison deal and the potential TikTok sale is likely to complicate future transactions between Chinese and American firms amid escalating tensions between the nations.

According to Patricia M. Kim, a U.S.-China relations expert, Beijing is attempting to maintain a strong response to U.S. pressure while avoiding the appearance of weakness domestically. She noted that scrutiny of the CK Hutchison deal reflects Beijing’s strategy to adopt a more combative stance toward the U.S. after implementing countermeasures against Trump’s trade actions.

Kim added that the outcome for CK Hutchison and TikTok hinges on whether a trade deal with the Trump administration seems viable. Chinese officials allegedly indicated to ByteDance that they do not want the company to be forced into a sale.

In a significant twist, Beijing’s unprecedented criticism of CK Hutchison came after the deal displeased President Xi Jinping, as the company did not seek approval from Beijing. Reports suggest that Chinese leadership aimed to leverage the Panama port issue in negotiations with the Trump administration but was caught off guard by the sale.

Since Trump’s administration began, China has strived to balance counteracting U.S. tariffs while keeping negotiations alive for a larger deal to ease tensions. This could include TikTok’s asset sales as part of broader agreement discussions.

While some analysts assert that China’s regulatory control over the CK Hutchison deal is limited—given that none of the ports are situated in China—legal experts maintain that Beijing could still scrutinize the transaction.

Meanwhile, TikTok faces potential shutdown in the U.S. unless ByteDance secures a buyer, including concerns about its autonomy and links to the Chinese government. The White House is deeply involved in the TikTok auction, with Vice President JD Vance leading the effort, marking an unprecedented level of government intervention in private business matters.

Contrary to CK Hutchison, ByteDance is heavily dependent on its domestic market across various sectors. Moreover, the Chinese government holds a 1% stake in one of ByteDance’s main subsidiaries through a ‘golden share,’ according to TikTok’s disclosures to U.S. senators in 2022.

CK Hutchison’s deal criticism makes it clear that if ByteDance accepts a forced TikTok sale without Beijing’s consent, it may encounter both regulatory and political challenges from Beijing, analysts cautioned.

Steve Vickers, CEO of a risk consultancy, suggested there might be a realistic chance for the ByteDance situation to be included in a more comprehensive settlement. He warned that the implications of the Panama case could translate into significant business risks across Greater China, Asia, and worldwide.