主題
21th, March, 2025
Recently, a well-known Hong Kong enterprise’s plan to sell the operating rights of 43 overseas ports, including two key ports along the Panama Canal to the U.S. based financial giant BlackRock has sparked widespread public debate. Sharp criticism has been voiced amid varying opinions. How the essence of this event can be discerned and analyzed from a legal perspective, and what steps should be taken by the involved Hong Kong company to handle the matter appropriately, are questions worth exploring. An attempt to break this down step-by-step is made in this article.
The Substance of the So-Called "Legitimate Transaction"
In recent years, China has been designated by the United States as its "primary competitor" and "most significant geopolitical challenge." Measures such as technology blockades, trade wars, and supply chain decoupling have been employed to curb China’s peaceful rise. Control over critical global infrastructure has been identified as a key U.S. strategy, with ports, as central nodes in global trade, emerging as prime targets. The Panama Canal, a vital artery for global shipping, handles approximately 6% of the world’s trade annually and serves as a critical link for trade between China and the Americas. As the canal’s second-largest user, China’s foreign trade stability and logistics costs are directly impacted by its operations, making it a matter of significant China's interest.
Legal Issues Potentially Implicated by the Transaction
At first glance, this sale might be perceived as an "ordinary commercial act." However, it must be evaluated within the complex context of great power rivalry. BlackRock, one of the world’s largest asset management firms, is widely recognized as having intricate ties to the U.S. government and former President Donald Trump. By acquiring control over ports such as Balboa and Cristobal at both ends of the Panama Canal, the United States could further strengthen its grip on the global shipping network and hinder the development of other nations. This transaction is seen as a tangible manifestation of U.S. efforts to influence global logistics, exert pressure on China’s foreign trade, and disrupt its supply chains. Far from being merely an "ordinary commercial act" between companies, it is regarded as aligning seamlessly with America’s strategy to contain China. The suggestion that the completion of this deal could inflict lasting damage on China’s economy and China interests is not considered an exaggeration. Nevertheless, attempts have been made to obscure this reality by framing it as a "legitimate transaction" under contractual freedom.
The severe consequences of this deal are widely acknowledged. Should these ports be transferred to U.S. ownership, logistics costs for Chinese enterprises could rise, their international competitiveness could be undermined, and long-term threats to China’s manufacturing sector and foreign trade might emerge. The advancement of the Belt and Road Initiative could also be impeded. It is generally understood that actions posing serious harm to China and societal interests are subject to legal regulation and sanctions, including those disguised as "legitimate means for illicit ends." What legal issues, then, might this transaction entail?
From a legal standpoint, violations can take many forms. Most commonly, the consequences of breaching a specific law are explicitly outlined in the legal text itself. However, not every provision in a legal system specifies penalties directly. For instance, principle-based provisions typically do not stipulate punitive measures. Yet, the absence of explicit consequences does not render them legally unenforceable. The principle that "the overriding goal of the ‘One Country, Two Systems’ framework is to safeguard China's sovereignty, security, and development interests" was incorporated into Hong Kong law last year, becoming a legally binding provision. Viewed through this lens, the transaction’s outcome which damage to China's security and development interests, could be interpreted as a direct violation of this principle. Breaches of such foundational legal principles are also regarded as breaches of the Hong Kong law.
How the Involved Hong Kong Enterprise Should Respond Appropriately
In response to the matter, Hong Kong Chief Executive John Lee recently stated that all transactions must comply with legal and regulatory requirements, and the Special Administrative Region (SAR) government would handle the issue in accordance with the law. Indeed, both Hong Kong’s local legal framework and the China's legal system are deemed robust. In recent years, China has accumulated substantial experience in countering Western suppression and extraterritorial sanctions, developing effective mechanisms to address such challenges. Legal tools exist at both China and SAR levels to tackle so-called "legitimate transactions" that harm China's interests. Claims that this deal is purely a "legitimate transaction" under contractual freedom are thus seen as overly simplistic and misguided.
As a nation governed by the rule of law, China is committed to upholding justice and fairness. Hong Kong, renowned globally as a hub of legal integrity, is distinguished by its comprehensive legal system and efficient judicial operations. Across both the mainland and Hong Kong, the lawful rights of businesses that adhere to the law and safeguard China's interests are rigorously protected, while ample opportunities for growth and commerce are provided. Conversely, entities or individuals who disregard the law and engage in actions detrimental to China security and development interests are likely to find their paths increasingly constrained. When commercial decisions prioritize narrow self-interest over China's well-being, the fleeting gains, however shrewdly calculated or lucrative, pale in comparison to the enduring stigma of public condemnation and accusations of "betraying China."
Conclusion
From the perspective of commercial merger and acquisition practices, a final piece of advice is offered to the involved enterprise and individuals: the settlement should be halted, and miscalculations leading to disproportionate losses must be avoided. Short-term gains should not be pursued at the expense of far greater long-term consequences.
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