Billionaire Li Ka-shing’s sale of assets in the Panama ports has dealt a heavy blow to China’s global “Belt and Road” strategy, triggering a series of strong reactions from China and leading to the demand from the White House for U.S. military preparedness in response to the Panama situation, including potential military intervention plans.
From March 15 to 17, Hong Kong’s pro-Beijing newspaper, Ta Kung Pao, published a series of articles accusing Li Ka-shing of “selling out the country.” Not only did the articles warn Li Ka-shing that if he “dances with American politicians,” he will “bear the historical infamy,” but they also demanded that all sectors of Hong Kong firmly stand with the Chinese Communist Party in the face of major issues.
What has caused China’s anger is that Li Ka-shing’s Hongkong Land and Wharf Holdings announced on March 4 that it would sell all 43 port assets in 23 countries to the U.S. investment firm Black Rock, which includes crucial assets at both ends of the Panama Canal—Balboa Port and Cristobal Port.
On the same day, President Trump announced this news during his State of the Union address to Congress, stating that the United States did not hand over the canal to China, and now the U.S. intends to reclaim it.
China denied Trump’s accusations. On March 5, Chinese Foreign Ministry spokesman Lin Jian claimed during a routine press conference that China has never interfered in the affairs of the Panama Canal.
However, a week later on March 13, the Liaison Office of the Central People’s Government in Hong Kong mouthpiece Ta Kung Pao published an article fiercely criticizing Li Ka-shing’s sale of assets, including those in the Panama Canal, as not a “mere commercial act,” condemning Li Ka-shing for “disregarding national interests” and “betraying and selling out all Chinese people.”
The article admitted that this sale would have an impact on China’s shipbuilding, shipping, foreign trade, and even the Belt and Road Initiative, affecting Hong Kong’s position as an international shipping and trade hub. On that day, the superior authority of the Liaison Office, the Hong Kong and Macau Affairs Office of the State Council of China, forwarded the article, and subsequently several official media outlets reprinted the report.
Political commentator Zhang Tianliang believes that China’s furious condemnation of Li Ka-shing effectively confirms Trump’s accusations.
In his program “Yanhe Commentary,” political commentator Yanghe pointed out that since China claims that the purchase of the port by U.S. capital could impact China, it indirectly acknowledges that China’s control of the port would have an impact on the U.S.
While Ta Kung Pao was attacking Li Ka-shing on March 13, the White House had already instructed the U.S. military to develop a plan to increase the deployment of American troops in Panama, in order to achieve President Trump’s goal of “taking back” the Panama Canal. The U.S. Southern Command is formulating potential plans, mainly to collaborate more closely with Panama’s security forces, with the decision to use military force depending on the level of cooperation between Panama and the United States.
The Panama Canal, completed in 1914, has always played a crucial role for the United States in its construction and management. The U.S. maintained control of the canal after its completion until 1977 when then-U.S. President Carter signed the Torrijos-Carter Treaties, handing over operational control of the canal to Panama in 1999. The treaty stipulates that the canal should remain neutral indefinitely, with the U.S. retaining the right to use force if the neutrality of the canal is threatened.
Based on this agreement, Trump has repeatedly expressed his desire to reclaim the Panama Canal, not ruling out the use of force. On January 7, during a press conference at Mar-a-Lago, he stated that he would not exclude the possibility of seizing control of the Panama Canal and Greenland through “military or economic coercion,” citing it as necessary for U.S. “economic security.”
On January 28, the U.S. Senate held a hearing to examine the impact of the Panama Canal on American trade and national security. Professor and Israeli legal expert Eugene Kontorovich of George Mason University stated that if the U.S. determines that China’s excessive influence over the canal or excessive tolls are affecting its neutrality, the U.S. has the “power of anticipatory self-defense” to intervene.
Chinese companies began entering Panama in 1999, just before Panama regained operational control of the canal. In 1997, Hongkong Land and Wharf Holdings obtained a 25-year concession to operate key ports at both ends of the Panama Canal.
After establishing diplomatic relations with China in 2016, Chinese companies accelerated their participation in local infrastructure projects in Panama. Nearly 40 Chinese companies are now conducting business in Panama, involving mining, finance, logistics, and telecommunications, among other fields. Panama has also joined China’s Belt and Road Initiative.
China Harbour Engineering Company and China Communications Construction Company participated in the bidding for the construction of the fourth bridge of the Panama Canal, a project launched in 2018 with a total investment of approximately $1.4 billion.
The Colon Free Trade Zone near the Atlantic entrance of the canal is the largest free trade zone in the Western Hemisphere, attracting investments from Chinese companies. In 2020, China Merchants Port Group established a trading hub here, including logistics and warehouse projects, enhancing its indirect influence on canal shipping.
According to a study by the Center for a Secure Free Society released at the end of 2022, the number of ports owned or operated by China globally has significantly increased. China has established a foothold in approximately 40 ports in Latin America, from Peru to Mexico.
The U.S. Southern Command has repeatedly warned about China’s investments in critical infrastructure, including deepwater ports, as well as in internet and space facilities, highlighting that these facilities could be used for dual military-civilian purposes for malicious business and military activities.
Author of “The Coming Collapse of China” and U.S. columnist Gordon Chang warned in an interview with Fox News on December 28 last year that China has various ways to block the Panama Canal during a war.
Chang said, “This is a broader issue because China (the CCP) can use its influence in South and Central America to disrupt the continuous movement and deployment of U.S. military assets in times of war. We rely on the Panama Canal to move warships from one place to another in the Atlantic and Pacific.”
On February 2, U.S. Secretary of State Mike Pompeo chose Panama as the destination for his first official visit after taking office. During a meeting with Panamanian President Jose Raul Mulino, Pompeo explicitly stated that China is threatening the Panama Canal, and immediate action is needed to address this situation.