CK Hutchison’s Panama ports deal: Between business decision and national security

I generally hesitate to say anything about what appears in the Chinese-language press, because it reaches me only second-hand, and in translation. But recent commentaries in Ta Kung Pao have me puzzled.

I do not participate in controversies about China, for or against. Such matters are not very interesting, and in any case, as a marooned Brit, none of my business. But I thought I understood how the game was played.

Take the row about Huawei and its exclusion from the business of providing telecom networks in Western countries. What we might call the Trumpeters’ tune is that there is no such thing in China as a private company. Whether or not Huawei wished to tweak its software to facilitate spying, it would have no choice.

But this is a smear peddled only by China haters and stirrers-up of trouble who wish to start a new Cold War. Actually, Huawei is free to make its own decisions and would not dream of tricking its customers in this way.

A similar division of views hovers over the Belt and Road scheme. Critics say this is a cunning ruse through which China can extend its ownership and control over vital links in the world trade network.

Not at all, explain the scheme’s defenders. Belt and Road projects are win-win affairs that benefit everyone concerned: both the trading countries at each end of the road and the country that actually contains the port, railway, canal, or whatever. They are a benevolent donation to the common good by China, and the eventual ownership of the items constructed will normally be vested in the country in which they sit.

Then there is the matter of the national security law. When this first appeared, many critics (I rather think I may have been one of them) complained that there was a shortage of precise definitions of the new offences created. Not at all, we were assured. The descriptions of the offences were perfectly adequate, and nobody who had read them carefully would be in any doubt as to what was intended.

All three of these comfortable thoughts have been thrown into doubt by the leader writers at Ta Kung Pao, who are generally assumed to be privy to the truth as senior Hong Kong government people see it.

The news that stirred all this up was that CK Hutchison – generally regarded as a Hong Kong firm, though most of its business is elsewhere and its registration is in the Cayman Islands – was selling 40 ports to an American consortium led by BlackRock. Among the ports in question are two next to the Panama Canal, about which President Trump has been complaining bitterly.

Hutchison’s explanation was that this was a purely business decision, basically to get out of the overseas ports business; the group will still own ports in Hong Kong and mainland China. In view of the danger of tariff wars shredding the international trading network, this is not an ostentatiously surprising decision.

It did not, though, go down well with Ta Kung Pao. Hutchison’s move was denounced as a “betrayal of all Chinese people,” an act of “spineless grovelling.” Former chief executive Leung Chun-ying asked, “Do merchants have no motherland?”

See also: State-backed paper’s criticism of Hutchison’s Panama port deal shared by Beijing’s office on Hong Kong affairs

Well, no doubt the whole thing would have looked more attractive if US President Donald Trump had not so rudely called for changes in the Panama Canal Zone in the first place.

On the other hand, if Hong Kong companies (we’ll leave the Cayman Islands out of it) are expected to tailor their activities to Beijing’s foreign policy objectives, how can we be expected to believe that mainland firms do not?

As the row rumbled on, the deal was stigmatised as sabotaging the Belt and Road initiative. This is not what we used to be told about the Belt and Road at all. Is Ta Kung Pao now of the view that the purpose of the Belt and Road scheme was to ensure that no container could be unloaded anywhere in the world without China’s approval and participation?

And as the writers warmed to their task, we came to the inevitable ingredient in any political storm these days: national security. Was the sale of the ports a national security crime?

Well, one rather hopes not. The crimes created by the national security law are secession, subversion, terrorist activities, and collusion with a foreign country or with external elements to endanger national security.

Clearly, the first three are not relevant, and it is difficult to see how the fourth could be applied to selling a business asset for a realistic price to a foreign buyer.

It may be a source of pride and pleasure for Chinese people to know that one of their numbers is a global presence, but it can hardly be a national security necessity for someone with a Chinese name to own a port on the other side of the Pacific.

A couple of thoughts might soothe. The first is that ownership of two Panama ports does not confer any power at all over the canal, which remains the property of Panama and under the control of the Panama government. The ports are actually outside the canal proper, and their main function is to deal with Panama’s own imports and exports. President Trump does not seem to know this, among many things.

The second is that the new American owners will not be under the same pressure or expectations that local patriots would like to exert on Hutchison. Much has been made of the fact that the chief executive of the buyers, BlackRock, is an old friend of Donald Trump.

Well, all these plutocrats go to the same parties, no doubt. But American business is not inhibited by concerns about the national interests of the US, or indeed anywhere else. Ethical standards have gone down the tubes over the last 50 years. Money trumps morals every time. Ports controlled by American companies will be ruled by pure greed, unsullied by politics. Doesn’t that feel better?