Hong Kong's commerce minister Algernon Yau summoned the Panamanian consul general to express strong dissatisfaction with a court ruling annulling CK Hutchison Holdings' ports concession in the Panama Canal. Yau warned that the decision seriously undermines international trade rules and urged Panama to respect contracts and provide a fair business environment. The move follows Panama's Supreme Court stripping the rights last week.
Hong Kong's government has issued a strong response to a Panamanian court ruling. Commerce and Economic Development Secretary Algernon Yau Ying-wah met with Panamanian Consul General Jose Ramon de Jesus Varela Fabrega on Friday evening, reaffirming the government's position. The Commerce and Economic Development Bureau stated in a social media post that the involved company has made massive investments and created numerous jobs in the region over many years.
Yau criticized Panama for undermining its own national credit, saying the move would cause profound damage to the country's business environment and economic development, and seriously undermine international trade rules. He urged Panamanian authorities to respect the spirit of the contract, provide a fair and just operating environment for legally operated businesses, and ensure that enterprises' legal rights are not interfered with. Yau was quoted as saying: "Hong Kong enterprises operating and investing in Panama should receive fair and reasonable treatment and protection."
This was not the first time Yau had summoned the consul general, though the bureau declined to comment on the date of the earlier meeting.
The backdrop is Panama's Supreme Court of Justice last week stripping the rights from Panama Ports Company (PPC), a subsidiary of CK Hutchison Holdings led by Hong Kong billionaire Li Ka-shing's family, to operate the Balboa and Cristobal terminals at each end of the Panama Canal. PPC has managed the ports since 1997 and renewed the contract for 25 years in 2021. Panamanian President Jose Raul Mulino vowed that the country would "never again" grant concession contracts to a single company for the terminals, aiming to adopt a multi-operator model to mitigate geopolitical risks and respond to US pressure. He stated: "Panama is a dignified country and will not allow itself to be threatened by any country on Earth."
Beijing slammed the court's decision last Friday and vowed to take all necessary measures to safeguard the rights of Chinese enterprises. Analysts say the episode highlights US-China rivalry in Latin America.