The planned sale of Hong Kong-based CK Hutchison’s global port assets, including its strategic terminals at both ends of the Panama Canal, has entered a new phase as negotiations now appear to include a major Chinese investor, COSCO Shipping Corporation. The inclusion of COSCO, China’s state-owned shipping giant, marks a critical shift in the dynamics of the $23bn deal, originally seen as a geopolitical win for Washington.

CK Hutchison, owned by the family of Hong Kong billionaire Li Ka-shing, announced in March it was in exclusive talks to sell its international port operations, excluding those in mainland China, to a consortium led by US asset manager BlackRock and Terminal Investment Limited (TIL), a subsidiary of Mediterranean Shipping Company (MSC), the world’s largest container line. The deal would transfer ownership of 43 ports across 23 countries, including the strategically vital ports of Balboa and Cristobal flanking the Panama Canal.

The proposed sale gained early praise from the administration of US President Donald Trump, who claimed the deal would help “take back” the Panama Canal from perceived Chinese control. However, the transaction has since become entangled in broader geopolitical tensions between Washington and Beijing.

The agreement faced immediate resistance from China’s top market regulator, which signalled in April it would scrutinise the deal under antitrust laws. Beijing state media labelled the transaction a betrayal of national interests, pointing to the ports' strategic value and underscoring the sensitivities around Hong Kong firms engaging in multibillion-dollar asset transfers involving Western buyers.

In response to the regulatory pressure and political pushback from Beijing, CK Hutchison confirmed in a recent stock exchange filing that it is now considering restructuring the consortium to include a “major strategic investor” from China. And according to reports from Bloomberg, that investor is likely to be COSCO, which has requested veto rights or similar control mechanisms within the consortium.

Although CK Hutchison did not name COSCO directly, sources close to the negotiations indicated the Chinese company’s involvement is central to reaching an agreement acceptable to Chinese regulators. Analysts suggest the inclusion of COSCO is a calculated move aimed at securing Beijing’s approval, without which the sale could face significant delays or collapse altogether.

The initial period of exclusive negotiations expired without a signed agreement, but all parties have opted to continue talks. CK Hutchison stated that any future transaction will only proceed if it receives authorisation from all relevant regulatory bodies, including those in China. The company has stressed its intention to allow sufficient time for further discussions and a possible reconfiguration of the consortium's ownership structure.

COSCO’s potential entry introduces new layers of complexity. According to a Reuters report, the Chinese shipping conglomerate is seeking significant influence over the final deal structure, possibly through veto power or board representation. This demand could trigger opposition from Washington, where any suggestion of renewed Chinese control over assets near the Panama Canal remains politically charged.

COSCO’s presence in Latin America has expanded notably following the construction of the $3.5bn Chancay megaport in Peru, a project developed in partnership with Peruvian firm Volcan and officially inaugurated in late 2024. It is the first Chinese-operated deep‑water port in South America, equipped with advanced automation and directly linked to China via reduced shipping transit (now around 23 days) and lower logistics costs of over 20%.

The project is part of a broader Chinese effort to improve logistical connectivity under the Belt and Road Initiative and is accompanied by additional infrastructure such as highways and a logistics zone. Analysts note that the Chancay port may shift regional trade dynamics by offering an alternative to the Panama Canal and positioning COSCO as a long-term operator in the Pacific maritime corridor.

A White House official, responding to Reuters, reiterated that the US never ceded control of the canal to China and suggested efforts to prevent Chinese involvement in strategic infrastructure will continue. Analysts warn that any final agreement involving COSCO may trigger fresh political scrutiny from US policymakers and delay regulatory clearance in jurisdictions aligned with Washington.

Market reactions to the news have been mixed. CK Hutchison shares initially surged 33% following the March announcement of the sale but later fell amid uncertainty surrounding regulatory approvals. The stock has since recovered some ground alongside a broader rebound in the Hong Kong market. Meanwhile, COSCO’s shares dropped 2.85% following reports of its bid for influence in the transaction.

The potential inclusion of COSCO also reflects the growing entanglement of commercial transactions with geopolitical agendas. Gary Ng, senior economist for Asia Pacific at Natixis, told AFP that the evolving structure of the ports deal shows how “business deals can be increasingly subject to politics in the new economic and geopolitical reality.”

The ports in question—Balboa on the Pacific and Cristobal on the Atlantic—have been operated by CK Hutchison under a long-term concession from the Panamanian government since 1997. Panama maintains that it retains full sovereignty over the canal and has downplayed suggestions of Chinese control. Recent meetings between Panama Canal officials and Chinese embassy delegates were described as routine diplomatic engagements focused on maritime trade cooperation.

Still, the geopolitical implications of the sale are difficult to ignore. The Panama Canal remains a critical shipping corridor, handling around 5% of global maritime trade. Any changes to the control or operation of adjacent ports, particularly those involving Chinese state entities, are bound to draw international attention.

The transaction, estimated at $23bn, including $5bn in debt, is being closely watched by financial markets. While BlackRock and MSC have not publicly commented on COSCO’s potential inclusion, analysts such as Cathy Seifert of CFRA Research suggest that accommodating a Chinese investor could endanger the deal’s prospects in the United States. David Blennerhassett, strategist at Ballingal Investment Advisors, said the move could “infuriate” Washington, especially under an administration sensitive to Chinese influence over global infrastructure.

Whether COSCO’s participation helps secure Chinese approval or complicates relations with Washington remains to be seen. But if it goes ahead, it would deal a blow to Trump's strategy of "taking back control" of the Panama Canal, as the ports would pass from a Hong-Kong-based private conglomerate, whose links to Beijing are only alleged, to a consortium which includes a firm directly under the control of the Chinese Communist Party.