China Tells State Firms to Freeze Panama Projects After Canal Ports Ruling

By Bloomberg News (Bloomberg) — China is asking state firms to halt talks over new projects in Panama, as part of Beijing’s broader retaliation after the Central American country voided CK Hutchison Holdings Ltd.’s contract to operate two ports along its strategic canal, according to people familiar with the matter.

The move could derail potential investments worth billions of dollars, the people said, asking not to be identified discussing private matters. Beijing has also asked shipping companies to consider rerouting cargo through other ports if it doesn’t result in significant extra costs, they added.

China’s customs authorities are also stepping up inspections on Panamanian imports such as bananas and coffee, the people said. Projects already underway may also be affected, they added, though no final instructions have been given yet.

The State-owned Assets Supervision and Administration Commission, which oversees Chinese state firms, and China’s General Administration of Customs didn’t reply to Bloomberg News’ faxed request for comment. CK Hutchison also didn’t immediately reply to Bloomberg’s request for comment.

The move came after Panama’s top court decision last week handed a win to President Donald Trump’s campaign to curb Chinese influence over strategic infrastructure in the Americas. It immediately drew condemnation from Beijing. China — the second largest user of the Panama Canal after the US — cautioned earlier this week that Panama would pay a “heavy price” for yielding to what it termed American hegemony.

China’s retaliation follows a similar move it adopted last year after CK Hutchison announced in March the sale of its global port assets — including its operation at Balboa and Cristóbal in Panama — to a consortium led by Italian billionaire Gianluigi Aponte’s Terminal Investment Ltd. and US investment firm BlackRock Inc. Back then Beijing criticized the sale as kowtowing to American pressure and told state-owned firms to hold off on any new collaboration with businesses linked to CK Hutchison’s Hong Kong billionaire founder Li Ka-shing and his family, Bloomberg reported. 

Still it remains to be seen if China’s current retaliatory measures would inflict significant pain on Panama. The US continues to hold sizable economic sway as Panama’s top trade partner and investor, even though Beijing has been encroaching on US dominance in the broader Latin American region over the years. Panama’s crops account for just a fraction of its total exports to China, while steering away from the Panama canal in most cases is bound to incur more costs and delays. 

The country also withdrew from China’s Belt and Road Initiative last year, a move that could also limit further collaboration in infrastructure building. So far Chinese state firms’ existing infrastructure projects in Panama include a $1.4 billion fourth bridge over the canal, a cruise terminal constructed by China Harbour Engineering Co. and a segment of a metro line by China Railway Tunnel Group Co.

Meanwhile, CK Hutchison, which has been operating the two Panama terminals since 1997, is seeking damages through international arbitration against the court ruling. 

The two Panama facilities have been the primary hurdle in the Hong Kong conglomerate’s ports sale. CK Hutchison and other parties involved in the deal are considering ways to move the discussions forward, including splitting the assets into separate parcels with different ownership structures, people familiar with the matter have said earlier. The arrangement could give Cosco larger stakes of ports in regions more friendly with China such as Africa, the people said.

If completed, the entire transaction could hand CK Hutchison more than $19 billion in cash, though analysts have expected smaller valuation and proceeds following the Panama ruling. 

© 2026 Bloomberg L.P.

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