{"id":47201,"date":"2025-05-13T02:29:12","date_gmt":"2025-05-12T18:29:12","guid":{"rendered":"https:\/\/chinaworker.info\/?p=47201"},"modified":"2025-05-13T17:23:29","modified_gmt":"2025-05-13T09:23:29","slug":"selling-out-the-country-us-and-china-in-neo-colonial-tug-of-war-over-panama-canal","status":"publish","type":"post","link":"https:\/\/chinaworker.info\/en\/2025\/05\/13\/47201\/","title":{"rendered":"“Selling out the country?”\u00a0US and China in neo-colonial tug-of-war over Panama Canal"},"content":{"rendered":"

Deal to sell port contracts to BlackRock of US is being blocked by Beijing<\/span><\/strong><\/p>\n

Dikang and Li Yong,\u00a0chinaworker.info<\/p>\n

Donald Trump declared his designs on the Panama Canal on day one of his return to power. \u201cWe didn\u2019t give it to China. We gave it to Panama, and we\u2019re taking it back,\u201d he said in his inauguration speech. The claim that \u201cChina\u201d controls the canal is a reference to Hong Kong tycoon Li Ka-shing\u2019s port business CK Hutchison, which operates the two ports, Balboa and Crist\u00f3bal, at each end of the 82-kilometer waterway. Trump has made no secret of his desire for territorial expansion, with Greenland and Canada among his other targets. This marks a return to 19th Century-style neo-colonialism.<\/p>\n

The Panama Canal is itself a symbol of colonialism and the rise of the US to become the world\u2019s major imperialist power. As part of the groundwork for the canal, which was completed in 1914, the US government of Theodore Roosevelt sponsored Panama\u2019s secession from Colombia in 1903 (Greenland take note!).<\/p>\n

Trump told the US Congress that the canal was \u201cbuilt at tremendous cost of American blood and treasure\u201d, but the work was performed mostly by black migrant labourers from Caribbean colonies. It is known as the world\u2019s deadliest ever construction project, killing 40 percent of its workforce. The US kept control of the canal until 1999, when it was returned to the Panamanian government. With $270bn of cargo passing through the canal every year, it accounts for 4 percent of Panama\u2019s GDP. 40 percent of all US container traffic goes via the canal.<\/p>\n

\u201cHemispheric Control\u201d<\/span><\/strong><\/p>\n

Almost all of Trump\u2019s territorial claims have a China connection. \u201cTrump\u2019s Greenland obsession is all about China\u201d was a headline in The Nation, an American monthly. As with the US-China trade war, this poses a serious dilemma for the CCP (so-called Communist Party) regime, which has a huge economic footprint in Latin America. Xi Jinping understands that this is not just about the canal, or Panama, which are of course strategically important from a trade perspective. This tug-of-war is about a much bigger prize for both imperialist governments.<\/p>\n

Li Ka-shing, whose business empire is caught up in the geopolitical crossfire, wanted to extricate himself by selling his 80% stake in the Panama Canal ports (plus dozens of ports in other countries) to a global consortium led by US financial company BlackRock. Any deal must be ratified by the Panamanian government. The 96-year-old tycoon, whose net worth is $37.4 billion USD, could sense this was an opportune time to cash out. It is not just that Panama risks becoming a black hole for Chinese capital, but also that Trump\u2019s wider trade war agenda, with seaborne cargo currently in huge decline, could decimate the profitability of ports around the world. However, Li\u2019s move, evidently negotiated without the full knowledge of the Chinese regime, has been blocked by Beijing.<\/p>\n

The Trump administration has been twisting the arm of the Panamanian government to expel \u201cthe Chinese\u201d in order to set an important precedent. This would strike a blow against China and its economic interests in Latin America as a whole. In February, just prior to a first visit by Trump\u2019s Secretary of State Marco Rubio, the Panamanian government of Jos\u00e9 Ra\u00fal Mulino gave Beijing 90 days\u2019 notice of its intention to quit China\u2019s strategic Belt and Road Initiative (BRI). For the CCP, this is actually a bigger blow than Hutchison relinquishing control of the canal ports.<\/p>\n

In 2017, Panama was the first Latin American country to join the BRI. This occurred at the same time as it severed relations with Taiwan in favour of Beijing. The CCP fears a domino effect of Latin American countries pressured by Trump to scale down their links with China, and an erosion of the BRI on the continent.<\/p>\n

The problems for China and the BRI are not just about Trump\u2019s pressure campaign. The overall view of the BRI has soured in Panama as several Chinese-run projects have been delayed, entangled in labour conflicts and disputes over murky finances. The CCP fears that of the 21 Latin American and Caribbean countries remaining in the BRI, several others are wavering.<\/p>\n

This is connected to wider global processes and the impact of Trump\u2019s aggressive trade tactics. Trump has imposed uniform 10 percent tariffs on all Latin American countries (except Mexico which has faced a separate campaign) and Xi\u2019s regime clearly hopes to capitalize on this by striking new deals with the continent\u2019s many disgruntled governments. But China\u2019s exports to these countries are already at such a high level it is hard to increase them further. Many of these governments have already taken or are discussing taking their own protectionist measures against Chinese goods.<\/p>\n

Mulino\u2019s government also initiated an audit of the port contracts, clearly under Washington\u2019s pressure, which delivered its report in April citing \u201cmany breaches\u201d of contract by CK Hutchison. The legal repercussions from this could result in heavy fines and even cancellation of the contracts, regardless of what happens with Li\u2019s efforts to offload the ports.<\/p>\n

All such moves take place in the shadow of the Trump regime\u2019s determination to secure de facto control over the canal, which is ultimately about geopolitics\u2014\u201chemispheric control\u201d as extreme right Trump supporter Steve Bannon says\u2014and not about alleged \u201covercharging\u201d or the economics of the canal. Under Panama\u2019s treaty with the US, whereby it regained control in 1999, the US still reserves the right to intervene militarily if the canal\u2019s \u201cneutrality\u201d is compromised. While a new invasion (the US last invaded Panama 35 years ago) isn\u2019t in the cards today, it cannot be ruled out at a later stage.<\/p>\n

What is Beijing\u2019s <\/span>a<\/span>ngle?<\/span><\/strong><\/p>\n

The CCP sees Li\u2019s deal as damaging to its own interests in the global power struggle with US imperialism. This is another example of how private sector tycoons in China (and Hong Kong) are allowed to wield enormous economic power and become obscenely rich, but they are not allowed to step on the toes of the state. The state and its \u201cnational security\u201d take priority over business and profit.<\/p>\n

This is now a growing global trend. As the era of neoliberal globalisation has faded and given way to inter-imperialist conflict and economic protectionism, governments in the US, Europe and elsewhere are increasingly blocking or restricting certain types of business activity in the name of \u201cnational security\u201d. US restrictions on Nvidia selling its chips to China are an obvious example\u2014these rules have cost the US company billions of dollars in lost business. Because China is a dictatorship it has even greater powers to put companies in their place (see our articles on chinaworker.info dealing with Chinese state capitalism).<\/p>\n

In March, a $22.8bn USD deal was announced whereby Li\u2019s CK Hutchison Holdings would sell its port operating rights in Panama, along with similar contracts in Britain, Netherlands, South Korea and other countries, to BlackRock. What is notable is the way the CCP registered its opposition to this deal. Rather than taking the matter head on with an official statement, the CCP launched a guerrilla-style campaign through its media and local state offices in Hong Kong.<\/p>\n

Ta Kung Pao, a CCP newspaper, published a series of commentaries denouncing Li Ka-shing for \u201cbetraying and selling out all Chinese people\u201d and emphasizing that the investment practices of Hong Kong capitalists should \u201cbe consistent with national interests.\u201d The Hong Kong and Macau Affairs Office and other top CCP-controlled agencies in Hong Kong reposted these articles, indicating a high level of official backing, to increase pressure on Li. The articles hinted at action to block the deal on \u201cnational security\u201d grounds. Shares in Hutchison fell sharply in Hong Kong, which was the intended effect.<\/p>\n

The CCP\u2019s use of indirect tactics could reflect several things. Possibly, it had been blindsided by the deal and was not yet clear about what to do. Possibly it wanted to \u201chide and bide\u201d by avoiding an official proclamation, unsure how the wider conflict with Trump would play out. Any such caution was blown away after \u2018Liberation Day\u2019 2 April, when Trump unleashed his massive trade war.<\/p>\n

The CCP has put the Blackrock deal on hold pending an \u201canti-monopoly\u201d review. The deal was originally due to be signed on 2 April. Xi\u2019s regime wants to use the Panama issue as a bargaining chip in its wider trade war negotiations with the US (talks are reported to start in Switzerland on 9 May). Hence its anger at Li Ka-shing for jumping the gun and threatening to deprive Beijing of a valuable chip.<\/p>\n

Given the geopolitical context (Panama is in the \u201cbackyard\u201d of US imperialism and heavily dependent on its economy) the CCP must realise that it is only a question of how and when the port contracts are given up, but that this is inevitable. It hopes to use this as a sweetener for a bigger deal with Trump to de-escalate the current crippling trade conflict (to what degree de-escalation is possible is another question). The media mauling of Li Ka-shing is intended to deliver a message to other private sector capitalists not to interfere with Xi Jinping\u2019s conduct of the geopolitical power struggle with Trump. This is tantamount to saying \u201ceverything has to go through the strongman leader\u201d\u2014mirroring the current political setup in the US.<\/p>\n

Against <\/span>a<\/span>ll <\/span>i<\/span>mperialism<\/span><\/strong><\/p>\n

The media attacks on Li Ka-shing reveal a lot about the current mentality of China\u2019s rulers and the CCP\u2019s extreme right nationalist online chorus. Li was accused of \u201cselling out the motherland\u201d. But the ports are in Panama\u2014so unless Li is revealed to be a Panamanian national, this accusation doesn\u2019t make any sense. All the port contracts (43 in total) that Hutchison plans to sell are overseas. None are in China or Hong Kong. Clearly, therefore, this is about China\u2019s own neo-colonial possessions in countries like Panama. When the CCP and China\u2019s right-wing nationalists rage about \u201cbetraying the Chinese people\u201d, they are really defending China\u2019s right to be an equally aggressive imperialist power as Trump\u2019s America with no regard for the people of Panama and other \u201csmall countries\u201d.<\/p>\n

For socialists, the issue is very clear. We believe the Panama Canal, its ports and all related businesses, should not be owned by foreign capitalists. They should be fully nationalised and placed under the democratic control of the working class. The workers\u2019 movement in Panama should call for solidarity from workers in the US, China, Hong Kong and elsewhere to resist the competing imperialist agendas of Trump and Xi, including the possible threat of US military intervention. In the era of turbocharged imperialism, workers need their own independent program and plan of action.<\/p>\n","protected":false},"excerpt":{"rendered":"

Deal to sell port contracts to BlackRock of US is being blocked by Beijing Dikang and Li Yong,\u00a0chinaworker.info Donald Trump declared his designs on the Panama Canal on day one of his return to power. \u201cWe didn\u2019t give it to China. We gave it to Panama, and we\u2019re taking it back,\u201d he said in his […]<\/p>\n","protected":false},"author":10,"featured_media":47195,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"tdm_status":"","tdm_grid_status":"","footnotes":""},"categories":[148,124],"tags":[207,38352,7382],"class_list":{"0":"post-47201","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-international","8":"category-news","9":"tag-ccp","10":"tag-panama-canal","11":"tag-trump"},"yoast_head":"\n"Selling out the country?"\u00a0US and China in neo-colonial tug-of-war over Panama Canal - China Worker<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/chinaworker.info\/en\/2025\/05\/13\/47201\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\""Selling out the country?"\u00a0US and China in neo-colonial tug-of-war over Panama Canal - China Worker\" \/>\n<meta property=\"og:description\" content=\"Deal to sell port contracts to BlackRock of US is being blocked by Beijing Dikang and Li Yong,\u00a0chinaworker.info Donald Trump declared his designs on the Panama Canal on day one of his return to power. \u201cWe didn\u2019t give it to China. 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