China has instructed state-owned companies to halt new business deals with entities linked to Hong Kong billionaire Li Ka-shing and his family. This follows Li’s plan to sell two ports in Panama to a BlackRock-led consortium, Bloomberg News reported Thursday.
Li’s telecom and retail conglomerate, CK Hutchison, has become a target in China’s politically sensitive deal with the U.S.-led firm. Earlier this month, the company agreed to sell most of its global ports business, including assets near the strategically crucial Panama Canal. The sale is expected to bring in over $19 billion in cash for the company.
The directive, issued last week to state-owned enterprises, came from senior Chinese officials, according to Bloomberg’s sources. Existing partnerships are not affected. Additionally, Chinese regulators are reportedly reviewing the family’s investments both in China and abroad to understand the full scope of their business activities.
CK Hutchison Holdings’ stock rose 1.2% by midday, after earlier peaking at 3.6%.
In the past two weeks, pro-Beijing newspaper Ta Kung Pao has published multiple commentaries criticizing the deal for harming China’s national interests, portraying it as a betrayal. Some of these commentaries were reposted by China’s Hong Kong and Macau Affairs Office, fueling speculation that Beijing may try to block the sale.
Chinese regulators, under the direction of central leadership, have reportedly begun investigating the deal, signaling Beijing’s dissatisfaction with CK Hutchison’s divestment under U.S. influence. U.S. President Donald Trump has expressed support for the transaction, after previously calling for the Panama Canal to be removed from what he considered Chinese control.
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