Panama's Supreme Court has annulled contracts allowing a Hong Kong-based company to operate container ports on the Panama Canal. The ruling comes a year after US President Donald Trump claimed China was 'operating the Panama Canal' - the main shipping link between the Atlantic and Pacific oceans. CK Hutchison Holding, through its subsidiary the Panama Ports Company (PPC), has operated two of the five ports since the 1990s. The court found that laws allowing the firm to operate the ports were 'unconstitutional', but PPC said the ruling 'lacks legal basis'.
Trump has made repeated claims that the Central American canal is under Chinese control. During his address last January, he stated: China is operating the Panama Canal and we didn't give it to China. We gave it to Panama and we're taking it back. The following month, US Secretary of State Marco Rubio demanded that Panama make 'immediate changes' to curb China's 'influence and control' over the canal.
Panama has previously rejected US claims, asserting that the canal 'is and will remain' under its sovereignty. There is no public evidence to suggest China exercises control over the canal, though Chinese companies have a significant presence there. CK Hutchison, founded by Hong Kong billionaire Li Ka-shing, is not owned by the Chinese government.
But Beijing's tighter political control over Hong Kong in recent years has changed perceptions of the company internationally. In light of the ruling, PPC expressed concerns for the well-being and stability of thousands of Panamanian families depending on port activities, stating they invested over $1.8 billion in infrastructure since 1997. Despite the ruling, President Jose Raul Mulino assured that port operations would continue without disruption, with APM Terminals Panama temporarily managing the sites.
The ruling could also affect CK Hutchison's plans to sell interests in ports worldwide, further inciting market reactions as CK Hutchison shares fell significantly in Hong Kong trading.
Trump has made repeated claims that the Central American canal is under Chinese control. During his address last January, he stated: China is operating the Panama Canal and we didn't give it to China. We gave it to Panama and we're taking it back. The following month, US Secretary of State Marco Rubio demanded that Panama make 'immediate changes' to curb China's 'influence and control' over the canal.
Panama has previously rejected US claims, asserting that the canal 'is and will remain' under its sovereignty. There is no public evidence to suggest China exercises control over the canal, though Chinese companies have a significant presence there. CK Hutchison, founded by Hong Kong billionaire Li Ka-shing, is not owned by the Chinese government.
But Beijing's tighter political control over Hong Kong in recent years has changed perceptions of the company internationally. In light of the ruling, PPC expressed concerns for the well-being and stability of thousands of Panamanian families depending on port activities, stating they invested over $1.8 billion in infrastructure since 1997. Despite the ruling, President Jose Raul Mulino assured that port operations would continue without disruption, with APM Terminals Panama temporarily managing the sites.
The ruling could also affect CK Hutchison's plans to sell interests in ports worldwide, further inciting market reactions as CK Hutchison shares fell significantly in Hong Kong trading.
