China’s regulatory authority recently announced it would review CK Hutchison’s $22.8 billion deal to sell 43 ports worldwide, including two at the Panama Canal. This came just hours after President Xi Jinping reassured global business leaders that China would offer a “predictable” business environment. At the same time, U.S. President Donald Trump framed the deal as part of his effort to “regain” control of the canal, adding political weight to the transaction.
The stakes extend beyond CK Hutchison’s balance sheet. Blocking the sale could strengthen Beijing’s control over global supply chains but would also undermine the recently published “2025 Foreign Investment Action Plan.” This plan aims to attract and retain foreign investment by expanding market access, easing financial restrictions, and enhancing the business environment. In 2024, more than 59,000 new foreign-invested enterprises were established in China, with foreign investment surpassing RMB 1 trillion (approximately $137.29 billion) for three consecutive years.
Conversely, approving the deal could ease U.S. pressure but expose China to accusations of weakness. Three possible scenarios emerge, each carrying significant implications.
Scenario 1: Allowing the sale to proceed
If Beijing permits CK Hutchison to complete the sale, it signals a commitment to market principles. This would align with Xi’s pledge to create a stable business environment, potentially boosting confidence among global investors. Given that foreign direct investment in China recently fell to its lowest level in decades, showing regulatory restraint could serve as a corrective measure.
The company, headquartered in Hong Kong, derives over 80% of its revenue from outside China. This limits Beijing’s direct leverage over CK Hutchison, making a hands-off approach plausible. By allowing the transaction, China could diffuse tensions with the U.S. at a time when Trump is expected to announce new reciprocal tariffs. It would also counter the narrative that all Chinese firms operate under Communist Party control.
However, this decision carries risks. Trump has falsely claimed that the Panama Canal is run by the Chinese military. Approving the sale might be seen as a retreat, reinforcing Washington’s position that Beijing’s influence is receding. Additionally, China would lose a potential bargaining chip ahead of any trade negotiations.
Scenario 2: Blocking the sale through regulatory scrutiny
An alternative approach is for Beijing to intervene directly. The State Administration for Market Regulation has already cited “public interest” concerns, providing legal cover to obstruct the transaction. This would not be without precedent. In 2023, China effectively blocked Intel’s $5.4 billion acquisition of Israel’s Tower Semiconductor by withholding approval. A year earlier, DuPont abandoned a $5.2 billion deal due to delayed Chinese regulatory clearance.
Blocking the sale would reinforce China’s control over key infrastructure. The Panama Canal is critical for trade, particularly between the U.S. and Asia. Maintaining Chinese-linked ports in this region could secure long-term strategic leverage. Furthermore, intervention could be framed as a countermeasure to Trump’s pressure campaign on Panama’s government to curb Chinese influence.
Yet, there are trade-offs. The move would undermine China’s messaging on economic openness and could deter multinational firms from expanding in its market. It could also expose CK Hutchison’s affiliates to retaliation. The company’s property arm, CK Asset, holds a significant mainland China portfolio, while Richard Li’s FWD Group aims to expand into China’s financial sector. These businesses could face punitive regulatory scrutiny.
Scenario 3: A conditional sale with Beijing’s oversight
A third option involves Beijing allowing the sale but attaching conditions. This approach would preserve China’s influence while avoiding outright obstruction. One possibility is ensuring that the new buyers include entities with ties to China. Alternatively, Beijing could insist on operational safeguards, such as veto power over future changes in port management.
This strategy would mirror past Chinese interventions where economic and political interests intersect. For example, China has used its export control regime to regulate sales of key technologies to the U.S., asserting its influence without outright bans. Similarly, by shaping CK Hutchison’s port sale terms, Beijing could protect its interests without jeopardizing investor sentiment entirely.
Nonetheless, conditional approval would still send mixed signals. While less disruptive than a full-scale block, it could introduce uncertainty for other Chinese firms considering divestitures abroad. It also risks prolonging regulatory scrutiny, delaying finalization of the deal beyond the original April 2 target date.
China’s decision will shape global perceptions
Whatever Beijing chooses, the outcome will resonate beyond CK Hutchison. If China allows the sale, it upholds investor confidence but risks appearing to cede control over strategic assets. If it intervenes aggressively, it reaffirms sovereignty at the expense of market credibility. A middle-ground approach might offer temporary relief but could still deter long-term investment.
As trade tensions escalate and economic conditions shift, Beijing’s handling of the CK Hutchison port sale will serve as a litmus test. Investors, governments, and multinational corporations will be watching closely.