Panama is among a growing number of markets that have become a tough sell for Hong Kong investors amid geopolitical headwinds. There is understandable concern about a court ruling nullifying a Hong Kong company’s rights to run Panama Canal ports. City leaders have rightly been pushing back in concert with the central government.
Chief Executive John Lee Ka-chiu on Tuesday
urged Panama to ensure “fair and reasonable” treatment of Hong Kong firms operating or investing in the Latin American nation. The city leader also cautioned that Hong Kong investors will be reviewing their investments.
Earlier, commerce minister Algernon Yau Ying-wah
summoned Panama’s envoy in the city to condemn
last month’s ruling by the country’s Supreme Court of Justice. The court said a long-standing deal for CK Hutchison subsidiary Panama Ports Company (PPC) to operate the Balboa and Cristobal terminals was unconstitutional.
China’s Hong Kong and Macau Affairs Office called the decision “legally unfounded and rationally absurd”. Beijing warned Panama of a “hefty political and economic price” if it does not change course. CK Hutchison Holdings has vowed to pursue all available legal options to defend its interests and PPC has
entered arbitration seeking “extensive damages”.
The responses are justified in the face of actions clearly linked to US President Donald Trump’s stance towards Beijing. He has repeatedly raised the Chinese presence in Panama as grounds for his threat to take back the waterway. Built in the early 20th century, the canal was controlled by the US until it was handed back to Panama at the end of 1999.
The recent White House pressure campaign has undermined business ties and caused disruption across the region that has been felt in China. Beijing, of course, still has friends in Latin America, most notably its
Brics grouping partner Brazil. Ties have deepened with the rise in Chinese spending and trade in the region. Since 2018, China has been Latin America’s second-largest trading partner.
