After the Panamanian court revoked the license of Hutchison Whampoa’s Panamanian port company (PPC) to operate two Panama Canal ports, unnamed insiders claim that China has instructed state-owned enterprises to halt negotiations on new projects in Panama as part of retaliatory measures.
Bloomberg, citing sources, reported that this move could block potential investments worth billions of dollars. China has also reportedly asked shipping companies to consider rerouting cargo to other ports, provided that it does not result in significant additional costs.
Sources also said that Chinese customs authorities are stepping up inspections on Panamanian imports such as bananas and coffee. Ongoing projects could be affected as well, though final instructions have not yet been issued.
The State-owned Assets Supervision and Administration Commission (SASAC) of China and the General Administration of Customs have not responded to Bloomberg’s faxed requests for comment. Hutchison Whampoa has also not responded to Bloomberg’s request for comment.
Last week, Panama’s Supreme Court ruled that the contract in question granted PPC exclusive privileges and tax exemptions in violation of the Panamanian constitution.
PPC said it has sought international arbitration and criticized the Panamanian government for taking over port operations before publicly announcing the ruling. The company also stated that it has faced various actions and unreasonable attacks from Panama over the past year, resulting in serious and imminent losses, and being treated completely differently from other port operators.