CK Hutch Ports sale can be good for Beijing too

HONG KONG : Li Ka-shing’s Ports deal is shrewd in all respects except for the timing. Beijing has warned the Hong Kong tycoon’s CK Hutchison opens new tab against bypassing its antitrust probe on the $23 billion disposal to a group including BlackRock (BLK.N), opens new tab and Swiss-Italian shipping giant MSC. Officials may want to use the assets as leverage in U.S. trade talks. Poor timing aside, China has good reason to like this sale.

On Sunday, China’s antitrust watchdog sent a rare warning to the Hong Kong group and potential buyers on changing the terms of the sale without its approval. Earlier this month, the Wall Street Journal reported, opens new tab that two Panama port assets – which emerged as a geopolitical lightning rod between Washington and Beijing – may be carved out from the rest of the deal, according to unnamed sources. The official warning effectively scuppers any attempts to fast-track the transaction spanning 43 ports in 23 countries.

Blame the unfortunate escalation on U.S. President Donald Trump‘s trade war with China. After unveiling, opens new tab the deal in March, CK Hutchison had hoped to sign “definitive documents” regarding the Panama disposal by April 2. That date coincided with Trump’s infamous Liberation Day when he unleashed a barrage of tariffs on U.S. trading partners including China, which now faces additional levies of 145%. No wonder state-linked newspapers accused, opens new tab the Li clan of betraying Chinese national interests.