China warns Panama of 'heavy prices' to pay after CK Hutchison contract quashed
World
China's Hong Kong and Macau Affairs Office called the ruling by Panama's Supreme Court "absurd," "shameful and pathetic," and vowed to defend the interests of Chinese firms.
BEIJING, Feb 3 (Reuters) - China warned Panama on Tuesday there would be "heavy prices" to pay after a court ruling there annulled Hong Kong-based CK Hutchison's (0001.HK), opens new tab contract to operate two ports at the Panama Canal.
China's Hong Kong and Macau Affairs Office called the ruling by Panama's Supreme Court "absurd," "shameful and pathetic," and vowed to defend the interests of Chinese firms.
Panamanian authorities did not immediately respond to a request for comment.
Last week's court ruling annulled a key contract that Panama Ports Company, a CK Hutchison subsidiary, has held since the 1990s to operate container terminals at the canal's Pacific and Atlantic entrances.
The legal decision, which cited constitutional violations and concerns over public interest, was seen as a win for Washington amid intensifying U.S.-China rivalry over the control of global trade routes.
The ruling threatens to disrupt the Hong Kong conglomerate's proposed $23-billion sale of 43 ports in 23 countries, including the two at the Panama Canal, to a consortium led by BlackRock (BLK.N), opens new tab and Mediterranean Shipping Company.
"The ruling ignored the facts, breached trust, and seriously damaged the legitimate rights and interests of enterprises in Hong Kong, China," the Hong Kong and Macau Affairs Office said on its social media account.
"China has sufficient means and tools, and sufficient strength and ability to defend a fair and just international economic and trade order," the office said.
If the Panamanian authorities "insist on having their own way ... heavy prices both politically and economically will surely be paid!" it added.
The court decision was welcomed by U.S. authorities. John Moolenaar, chair of the U.S. House Select Committee on China, called it a "win for America."
Without naming the U.S. in the statement, the Chinese office said "some country has ... used bullying tactics to force other countries to obey their will," and that Panama had "willingly succumbed" to hegemonic power.
U.S. President Donald Trump, who initially celebrated the proposed $23-billion ports sale, has called for the U.S. to "take back" the Panama Canal in the face of Chinese influence.
CK Hutchison's subsidiary last week said the ruling was inconsistent with the legal framework that had allowed it to operate the ports.
