On March 5, Chinese Foreign Ministry spokesperson Lin Jian affirmed China’s commitment to keeping the Panama Canal a neutral international waterway and said China has never interfered in its management.
The claim is misleading.
China has been using its Belt and Road Initiative, or BRI, to strategically expand its presence in seaports worldwide. Analysts say that by securing key ports, Beijing is aiming to strengthen its geopolitical influence to dominate global trade and maritime logistics.
China’s ‘colonial enclave’
On January 20, Panama began a financial audit of Panama Ports Company (PPC), a subsidiary of Hutchison Ports Holdings, which had owned terminals on each end of the Panama Canal since 1997 until selling its operations last week to a U.S. consortium led by BlackRock.
Panama’s Comptroller General Anel Bolo Flores said the audit was to “ensure efficient and transparent use of public resources” as PPC’s growth in cargo volume has not translated into adequate financial returns for Panama.
The Chinese turned the Panama Canal into “a colonial enclave that replaced the Americans,” Flores said.
Hutchison Ports’ parent company, CK Hutchison Holdings, is a Hong Kong-based multinational firm registered in the Cayman Islands.
CK Hutchison Holdings has faced standing allegations of collusion with the communist regime in China. Its founder, Li Ka-shing, had well-established and lasting ties with Chinese Communist Party leaders, Le Figaro reported in 2018.
Li’s son and successor, Victor Li, is a longtime member of the Chinese People’s Political Consultative Conference, a top political advisory body.
The public perception of the company as allied with the Chinese regime intensified in 2000, when the Hong Cong government, without a public auction, secured a deal withLi Ka-shing’s son Richard Li to develop a highly desired waterfront property into a hi-tech project called Cyberport.
South China Morning Post described the elder Li in 2017 as “the biggest beneficiary” of the state-run BRI, as his company operated 22 ports in 18 countries, accounting for over 86% of its total throughput and mirroring the BRI route. CK Hutchison Holdings played a key role in the BRI expansion, the paper said.
National security concerns
In June 2021, the Panama Maritime Authority revoked a 2016 concession granted to China-based Landbridge Group to build the Panama Canal Container Port terminal in Colón after conducting an audit over strategic concerns and violations of investment and local labor hiring requirements, among other issues.
In November 2018, the Australian government rejected CK Hutchison Group’s $9.5 billion bid to acquire Sydney-based pipeline operator APA Group. Treasurer Josh Frydenberg said the acquisition would be “contrary to the national interest.”
This decision followed a 2016 ban on a joint bid by CK Hutchison and Chinese state-owned State Grid Corp. for a majority stake in Australia’s electricity distributor Ausgrid.
In May 2020, Israel rejected a bid from an affiliate of CK Hutchison Group to build the Sorek 2 desalination plant, citing concerns about Chinese involvement in critical infrastructure. The U.S. had previously warned Israel about potential security risks linked to Chinese investment, particularly in the strategic sectors.
Belt and Road Initiative
Chinese leader Xi Jinping announced the BRI concept in September 2013, describing it as seeking to improve trade routes and infrastructure across Asia, Africa, Europe and beyond. It includes building or acquiring major port facilities in strategic locations.
As it does with the Panama Canal, Beijing claims neutrality in BRI investments, framing them as part of economic cooperation and infrastructure development. Critics, however, argue that China uses BRI to expand its global influence.
Craig Singleton of the Foundation for Defense of Democracies warns these ports give Beijing political leverage not just over host nations but also their neighbors.
The U.S. Council of Foreign Relations’ (CFR) interactive tracker of ports outside of China owned or operated by Chinese companies includes 129 ports globally, of which the Chinese government owns over 50%. CFR identified 91 ports as having “physical potential for naval use,” in 14 of them China owns a majority stake.
Conclusion: China’s expanding control over key ports through the BRI is raising concerns about its influence on global trade and security. While Beijing insists on its neutrality, countries such as Panama, Australia, and Israel are pushing back, citing security risks of China’s growing presence in critical maritime hubs.
