Hong Kong–based conglomerate CK Hutchison’s deal with BlackRock was not confined to the ports at the Panama Canal, so if Xi Jingping is angry about that part of the deal he is angry about other parts too. But the Panama Canal ports are probably more important than any of the others, considered individually, that Hutchison has agreed to relinquish (“China’s Xi Is Angered by Panama Port Deal That Trump Touted as a Win,” March 18, 2024).
The Xi leadership had originally planned to use the Panama port issue as a bargaining chip in negotiations with the Trump administration, according to people close to Beijing’s decision-making, only to see the rug pulled out from under it….
Despite Beijing’s unhappiness, it doesn’t have a simple way to halt the deal. The assets to be sold are all outside mainland China and Hong Kong, and the parties to the transaction have expressed confidence that it can be completed.
The deal puts Xi in a tricky position. On one hand, Beijing has had to make clear its anger over the Hong Kong company’s move, which came without advance notice, to protect Xi’s strongman image, the people close to decision-making said. On the other, they said, Beijing is aware that any significant effort to torpedo the deal risks escalating tensions with the Trump administration. So far, China has been relatively restrained in its retaliation against Trump’s new tariffs on China, suggesting its desire to keep tensions under control….
The $22.8 billion deal isn’t yet final. The companies have said they hope to sign definitive documents by April 2, after which various regulators would need to give consent….
Beijing hasn’t been happy with Li [“96-year-old Hong Kong billionaire Li Ka-shing,” founder of Hutchison, shown above] for years, they said, as the Hong Kong tycoon has reduced his reliance on mainland China and Hong Kong….
On Tuesday, Hong Kong’s chief executive, John Lee, said the Hong Kong government opposed “the abusive use of coercion or bullying tactics in international, economic and trade relations.” He said Hong Kong would handle the deal in accordance with the laws and regulations.
The Journal’s reporters don’t tell us anything about the persons “close to Beijing’s decision-making” who conveyed Xi’s thinking on this. Are the leaks by these adjutants Xi-approved? Xi-unapproved? In any case, is it true, as the Journal blurbs, that Xi’s “tools to block sale by Hong Kong company are limited”?
China is a totalitarian country, and China has stamped out Hong Kong’s fragile post-1997 political independence. One of the tools of a totalitarian state is the willingness to say “Do what we want or else” and follow up.
So Xi has the tools required to block a sale by a Hong Kong–based company. The assets in process of being sold may be outside of China, but CK Holdings is not based outside of China. The headquarters are on Queen’s Road Central in Hong Kong. See page 275 of Hutchison’s 2023 Annual Report.
The law
It is not entirely reassuring that the China’s top lackey in Hong Kong, John Lee, who issues bounties on the heads of pro-democracy activists for the crime of championing democracy, pretends to oppose “abusive use of coercion or bullying tactics” at least when it comes to international trade. Or that Lee assures the world that the deal will be handled “in accordance with the laws and regulations.”
China’s laws and regulations are often bad, as bad as can be, and when they seem good are often contradicted by ensuing sentences or anyway ignored whenever the government finds it convenient to ignore them. It’s a dictatorship.
Article 35 of the Chinese constitution guarantees “freedom of speech, of the the press, of assembly, of association, of procession and of demonstration.” Rock-solid until you flourish a white sheet of paper in public.
Article 36: “No State organ, public organization or individual may compel citizens to believe in, or not to believe in, any religion; nor may they discriminate against citizens who believe in, or do not believe in, any religion.” Unless citizens engage in religious activities that “disrupt public order” or “interfere with the educational system of the State.”
Article 37 asserts the inviolability of “the freedom of the persons of the citizens of the People’s Republic of China.” Nobody may be unlawfully detained. If the state detains you, that’s lawful.
Etc.
Let us hope that if Xi really does not want the ports to be sold to BlackRock, he is indeed too scared of President Trump to stop the sale.
