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A company from Hong Kong that runs ports near the Panama Canal has agreed to sell shares of its business to a group that includes BlackRock Inc. This decision comes after former U.S. President Donald Trump accused China of interfering with operations at this key shipping route.
In a report, CK Hutchison Holdings said on Tuesday that it would sell all shares in its two companies, Hutchison Port Holdings and Hutchison Port Group Holdings. These companies control 80% of Hutchison Ports, which operates 43 ports in 23 countries.
The buyers, including BlackRock, Global Infrastructure Partners, and Terminal Investment Limited, will take over 90% of Panama Ports Company. This company owns and manages the Balboa and Cristobal ports in Panama.
In January, U.S. Senator Ted Cruz, a Republican, warned that China could use the ports to control or block canal traffic. He also said the ports could act as “observation posts” for Chinese activity.
“This is a serious threat to U.S. national security,” Cruz stated.
U.S. Secretary of State Marco Rubio visited Panama in early February and urged its president, Jose Raul Mulino, to reduce Chinese influence over the canal. Rubio warned that failing to do so could lead to U.S. retaliation. However, Mulino denied that China had any control over the canal.
Following Rubio’s visit, Panama decided to leave China’s Belt and Road Initiative, which led to criticism from Beijing.
While Trump talked about possibly taking back control of the canal, his administration also focused on Hutchison Ports, the company managing key ports at both ends of the canal.
Hutchison Ports had recently received a 25-year contract extension without a bidding process. However, an audit was already being conducted to review the deal. Many believed this was the first step toward offering the contract to new bidders. Rumors also suggested that a U.S. company with ties to the White House might be preparing to take over.
Sources: AP, CBS News, CK Hutchison Press Release.
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