China has escalated its criticism of Panama after the country’s top court voided a Hong Kong firm’s license to operate ports at either end of the Panama Canal, warning Panama it would “inevitably pay a heavy price” unless it reverses course.
In a commentary posted Tuesday on WeChat, China’s Hong Kong and Macao Affairs Office condemned the Panama Supreme Court ruling as “logically flawed” and “utterly ridiculous,” saying both the Chinese central government and the Hong Kong government oppose the decision.
The ruling annulled contracts held by Panama Ports Co. (PPC), a subsidiary of Hong Kong-based CK Hutchison, to operate the Port of Balboa on the Pacific coast and Cristóbal on the Atlantic side, citing constitutional violations. The decision was widely viewed as a victory for the Trump administration, which has prioritized limiting China’s influence over the strategic waterway.
“The Panamanian authorities should recognize the situation and correct their course,” the Hong Kong and Macao Affairs Office said, adding that continued defiance would carry political and economic consequences.
China’s response marked a sharper tone than its initial reaction. Last week, a Chinese foreign ministry spokesperson said the ruling was inconsistent with Panama’s laws governing port franchises and pledged that Beijing would take necessary measures to protect the rights of Chinese companies.
CK Hutchison said it has launched international arbitration proceedings against Panama, with PPC seeking “extensive damages” over the annulled licenses. The company did not specify the amount sought.
The court decision follows comments made about a year ago by U.S. President Donald Trump, who threatened to seize control of the Panama Canal, calling it vital to U.S. interests and claiming it was effectively being operated by China.