China is threatening to block a massive global ports deal unless its state-owned shipping company Cosco is given a stake in the agreement, according to The Wall Street Journal, which first reported the confrontation. The deal involves the transfer of control of 43 international ports, including two at the strategic Panama Canal, from Hong Kong-based CK Hutchison to Western giants BlackRock and Mediterranean Shipping Company (MSC). The transaction, valued at nearly $23 billion, is now under pressure from Beijing, which is demanding that Cosco be included as a shareholder.
The Scope of the Deal
CK Hutchison, the ports and infrastructure conglomerate founded by Hong Kong billionaire Li Ka-shing, announced in March that it would sell its 80 percent stake in its global port business. The deal includes ports across 23 countries and has an enterprise value of $22.8 billion, including debt. In May, Hutchison confirmed that the buyer would be a partnership led by BlackRock, one of the largest investment firms in the United States, and MSC, a family-run shipping company based in Switzerland and controlled by Italian billionaire Gianluigi Aponte.
Two of the ports involved in the deal are positioned on opposite sides of the Panama Canal, a waterway considered vital to global trade and U.S. national security interests. These ports have long drawn scrutiny due to China’s past involvement. CK Hutchison has operated both locations for years, a fact that has previously raised alarms in Washington.
China’s Ultimatum
Beijing is now insisting that Cosco Shipping Holdings, a massive Chinese state-owned enterprise, be granted a share of the deal. According to The Wall Street Journal, Chinese officials have “told BlackRock, MSC and Hutchison that if Cosco is left out of the deal, Beijing would take steps to block Hutchison’s proposed sale of the ports.”
The pressure has already had an effect. People familiar with the talks told the Journal that all three parties—BlackRock, MSC, and Hutchison—are now open to Cosco taking a stake. However, the deal cannot be modified until a July 27 deadline for exclusive talks between the original parties expires.
China’s approach appears to be retaliatory. According to the report, Beijing has instructed state-owned enterprises to freeze any new business with CK Hutchison or companies linked to Li Ka-shing’s business empire unless Cosco is included in the ports transaction.
China’s Justification and Public Comments
Publicly, China is trying to frame the situation in more diplomatic terms. At a recent press briefing, Chinese Foreign Ministry spokesman Lin Jian said, “China has always been firmly opposed to the use of economic coercion, hegemony, bullying, and infringement of the legitimate rights and interests of other countries.” Yet behind closed doors, Chinese officials are making it clear that Cosco’s involvement is a non-negotiable condition.
Beijing’s aggressive stance echoes past behavior. In 2014, Chinese regulators blocked a proposed alliance among MSC, Denmark’s Maersk, and France’s CMA CGM, which would have created a powerful vessel-sharing network across global shipping lanes. At the time, China’s Ministry of Commerce claimed the deal would harm competition and hurt China’s trade interests.
U.S. National Security Concerns
The United States is watching the deal closely. President Donald Trump has called the proposed sale to BlackRock and MSC a move toward “reclaiming” the Panama Canal and reducing Chinese influence in the region. The White House has not commented directly on China’s latest threat, but members of Congress have already issued warnings.
Representative John Moolenaar, a Republican from Michigan and chair of a key congressional committee on China, sent a letter to a Panamanian official saying, “The inclusion of Cosco or any other Chinese company in port operations at the canal would represent an unacceptable risk to the national security of both our nations.”
According to The Wall Street Journal, the Trump administration has long opposed Hutchison’s presence at the Panama Canal and sees this deal as a rare opportunity to shift control of the ports to Western hands.
The dispute is not occurring in isolation. It comes amid renewed trade talks between the United States and China, which resumed in Switzerland earlier this year. Chinese representatives reportedly brought up Cosco’s involvement in the ports deal during those discussions as a way to ease broader trade tensions.
Beijing appears to be using its influence in the ports industry as a strategic lever. China’s Commerce Ministry has a history of reviewing and blocking international business deals that involve Chinese interests or global logistics. In this case, China holds considerable leverage: BlackRock and CK Hutchison both have significant operations and partnerships inside China, and MSC is a major mover of Chinese exports across the globe.
If the current deal proceeds without Cosco’s involvement, China could retaliate economically or block regulatory approval within its jurisdiction. If Cosco is included, Beijing strengthens its position in the global ports network at a time when Washington is trying to reduce Chinese control over key infrastructure.
The window to finalize the current version of the deal is closing fast. The exclusivity period for talks between BlackRock, MSC, and Hutchison ends on July 27. After that, new players—including Cosco—could legally be added to the agreement.
If the deal closes with Cosco onboard, MSC would likely become the largest port operator in the world, while BlackRock would secure control of the Panama Canal ports. Such an outcome could mark a major shift in global logistics and a symbolic win for China, despite U.S. efforts to push it back.
ACZ Editor: This is a strategic negotiation point in the larger trade negotiation between the U.S. and China. It will not be acceptable for China to be involved in ports in Panama, so best case there will be a trade off, worst case (and very unlikely) China will be removed from the picture forcefully.
