China’s criticism of Hutchison ports deal raises stakes for TikTok US sale

Beijing’s criticism of Hong Kong conglomerate CK Hutchison’s move to sell its ports business is a precursor to heightened political scrutiny of major Chinese business divestments involving American buyers, analysts say.

The criticism of the deal, including the sale of assets near the Panama Canal to a BlackRock-led consortium, will, in particular, sharpen the scrutiny of a possible sale of the US assets of TikTok, owned by Chinese firm ByteDance, they added.

US President Donald Trump, who previously criticised what he perceived as Chinese control of the Panama Canal, hailed the deal, terming it the “reclaiming” of the canal within hours of the transaction’s announcement on March 4.

A week after that news, China’s Hong Kong and Macau Affairs Office reposted two commentaries criticising CK Hutchison and saying the sale was a betrayal of China that neglected national interests.

Chinese regulators, under the instructions of central leadership, have begun looking into the deal, said one source with knowledge of the matter, a sign of Beijing’s discontent with CK Hutchison’s divestment under perceived US pressure.

The person declined to be named because of the sensitivity of the matter. China’s State Council Information Office (SCIO), which handles media queries on behalf of the Chinese government, did not respond to Reuters requests for comment.

CK Hutchison also did not respond. Bloomberg first reported the development on Tuesday.

In its earnings statement on Thursday, CK Hutchison made no mention of the ports deal, although it said that “geopolitical and trade tensions have ... risen significantly”.

The heavy politicisation of the CK Hutchison deal and the sale of TikTok’s US business are set to cast a long shadow over deals involving Chinese and American companies amid growing tensions between the world’s two largest economies.

“Beijing is balancing multiple priorities -- it’s trying to project a strong stance against US pressure while ensuring it does not appear weak, particularly in the eyes of its domestic audience,” said Patricia M Kim, a US-China relations expert and a fellow at the Brookings Institution.

Kim said the scrutiny of the CK Hutchison deal was part of Beijing’s broader strategy to “adopt a more combative tone” towards the United States after unveiling countermeasures in response to trade actions by the Trump administration.

“Beijing’s ultimate decision on whether to complicate the port transaction or others like the TikTok deal will likely hinge on its assessment of whether a trade deal with the Trump administration remains viable,” Kim said.

Chinese officials have indicated to ByteDance executives in recent months that Beijing doesn’t want the company to be forced to sell control of the app to US investors, another source with knowledge of the matter said.

The SCIO, ByteDance, and TikTok did not respond to Reuters’ request for comment on the matter.