Beijing has investigated Hong Kong tycoon Li Ka-shing’s proposed deal to sell his global ports, including two at the Panama Canal, to BlackRock after failing to change Li’s mind with closed-door and public pressure.
Senior Chinese leaders have ordered several government agencies, including the State Administration for Market Regulation, to scrutinize the proposed deal, Bloomberg reported on Tuesday, citing unnamed sources.
The report said the probe will check whether the transaction involves any potential security breaches or antitrust violations, but it will not necessarily result in any follow-up action.
A CK Hutchison spokesperson told Reuters that the company will not hold any press conference or investor call after announcing its 2024 results on Thursday.
On March 4, CK Hutchison said it had agreed to sell its entire 80% stake in Hutchison Ports – which owns, operates and develops 43 ports comprising 199 berths in 23 countries – to a consortium led by BlackRock, Global Infrastructure Partners and Terminal Investment Limited (TiL) for US$22.8 billion. However, it will not sell its ports in Hong Kong and mainland China.
The company said it will finalize the deal within the next 145 days.
On the evening of March 4, United States President Donald Trump said in his speech to Congress that his administration saw progress in reclaiming the Panama Canal as an American firm would buy both ports around the canal.
Victor Li’s meeting
CK Hutchison announced the deal on March 4, the same day when the Chinese People’s Political Consultative Conference (CPPCC) held the opening ceremony of its annual meeting in Beijing. In China, this meeting and that of the National People’s Congress (NPC) are called the “two sessions.”
During the “two sessions,” arrangements were made for Victor Li, the elder son of Li Ka-shing and chairman of CK Hutchison, to meet with a “national leader” to discuss the Panama ports deal, Greenbean, a United Kingdom-based media outlet run by Hong Kong journalists, reported on March 16.
There are eight “national leaders” in China, including Chinese President Xi Jinping, Premier Li Qiang, five other members of the Standing Committee of the Chinese Communist Party (CCP) Central Committee’s politburo, and Vice President Han Zheng. There are more than 60 deputy national leaders.
Citing people familiar with the situation, Greenbean said that Victor Li told the unnamed Chinese leader that CK Hutchison is selling its ports to an Italian firm, which refers to the TiL Group, parent of the world’s largest container shipping company, Mediterranean Shipping Company (MSC).
The report said Li Ka-shing, 96, is a close friend of MSC founder and chairman Gianluigi Aponte while BlackRock Chairman Larry Fink is a friend of Trump.
The meeting between Victor Li, who is only a CPPCC member, and a national leader is abnormal in terms of their respective political titles.
Currently, 124 out of about 2,100 CPPCC members are from Hong Kong, including 16 standing members (mainly tycoons) and one vice chairman. Former Hong Kong Chief Executive Leung Chun-ying is now a CPPCC vice chairman.
Victor Li had been a CPPCC standing member since 1998 until he was “demoted” to just a member in March 2023. Other CPPCC members include some small-and-medium-sized enterprise (SME) owners and academics.
In March 2021, Beijing changed Hong Kong’s election system by removing the say in the election that Li Ka-shing had enjoyed as a member of the 1,200-member Election Committee empowered to choose the city’s next chief executive.
Media reports said Beijing was unhappy that Li had kept selling assets in China to invest in Europe for many years and refused to join its campaign to slam Hong Kong’s anti-extradition protesters in 2019.
‘Foreign collusion’
After the “national leader” failed to persuade Victor Li to stop the transaction, Ta Kung Pao, the CCP’s mouthpiece, opened fire on him.
An article published on March 13 criticized CK Hutchison’s Panama Ports deal as “kneeling, profit-seeking, a trade of integrity for profits, a disregard for national interests and national justice, and a betrayal of all Chinese people.”
The newspaper said in its editorial on March 15 that all great entrepreneurs are staunch patriots. It said that Li’s ports deal has hidden political calculations, does not take into account China’s interests, and helps the evil tyrant harm China and the world.
The editorial said many Chinese entrepreneurs, such as Huawei’s founder Ren Zhengfei, are proud to be sanctioned by the US and willing to help China break the United States’ technological blockade.
The Chinese State Council’s Hong Kong and Macao Affairs Office (HKMAO) circulated both articles on its website, prompting many Chinese commentators to attack Li.
“Li Ka-shing colluded with the American BlackRock Group. We should take action on this matter,” Wang Qiang, a professor at Fudan University and a military columnist, says in an article published on March 15.
“Li had taken a lot of benefits from mainland China in the past. But during the Hong Kong riots, he showed his ugly face, allowing us to see clearly what kind of capitalist he is.”
Wang says after the US controls all of Li’s ports, including those at the Panama Canal, it can use any excuse to suppress Chinese shipping companies, for example, by raising the docking fees exponentially or using “long-arm jurisdiction” to ban Chinese ships from docking.
“This is a special and precise attack on China’s manufacturing sector, especially on our Belt and Road Initiative,” he adds.
“It is very difficult to guard against a thief at home, and Li Ka-shing is China’s ‘thief at home’,” he says. “Li’s CK Hutchison is backstabbing our national strategy. This is a naked violation of the national interests of the People’s Republic of China. We must deal with him in accordance with the relevant laws of the country and the Hong Kong Special Administrative Region.”
On Tuesday, Hong Kong’s Chief Executive John Lee said that concerns expressed over CK Hutchison’s deal to sell its global port operations to a US consortium are worthy of “serious attention,” saying that foreign governments should provide a fair environment for deal-making.
Lee added that the Hong Kong government would ensure that any transactions were made in accordance with the law. However, he did not answer a journalist’s question about whether the Hong Kong government would use the city’s National Security Law to handle the case.
On June 30, 2020, China’s NPC Standing Committee passed a set of national security laws, which include an offense called “collusion with foreign or external forces to endanger national security.”
According to the law, “national security” means the status in which China’s political regime, sovereignty, unity and territorial integrity, the welfare of the people, sustainable economic and social development, and other major interests of the state are relatively free from danger and internal or external threats, and the capability to maintain a sustained status of security.
A foreign company can be an external force if its directors are accustomed to or under an obligation (formal or informal) to act according to a foreign government’s directions, instructions, or wishes.
Colluding with an external force means that a person acts in cooperation with an external force or with its financial contributions or other support.
Yong Jian is a contributor to the Asia Times. He is a Chinese journalist who specializes in Chinese technology, economy and politics.
Read: Beijing calls Li Ka-shing a ‘traitor’ in Panama ports deal
