China issues warning to Panama over Hong Kong shipping company dispute

Panama’s Supreme Court has annulled the contract between Hong Kong firm CK Hutchison and the Panama Ports Company, allowing for international arbitration proceedings to begin. The decision was made amid pressure from the United States.

The Chinese government’s Hong Kong and Macau Affairs Office (HKMAO) has expressed its dissatisfaction with the ruling, calling it “absurd” and “shameful”. The office stated that the court ignored facts, breached trust, and damaged legitimate rights and interests of enterprises in Hong Kong, China. China has warned Panama that further action may result in significant economic consequences.

The US President had previously threatened to seize control of the Panama Canal, claiming it was under Chinese control due to its strategic location. The Panamanian court’s decision follows this statement.

CK Hutchison has announced plans to pursue international arbitration proceedings against Panama. The company stated that it strongly disagrees with the determination and corresponding actions in Panama and reserves all rights, including recourse to additional national and international legal proceedings.

The Panama Maritime Authority (AMP) has temporarily taken over the operation of two ports previously operated by CK Hutchison’s subsidiary. The canal handles a significant portion of global trade, with approximately 40% of US container traffic and 5% of world trade passing through it.

China has stated that it will defend its interests in international economic and trade matters. Panama has not yet responded to comments from the Chinese government regarding the court ruling.

Source: Al Jazeera