China and US clash at UN over Panama Canal

I’m sure no one in the Carter Administration envisioned China effectively running the Panama Canal when they gave the Canal Zone back to Panama. I say that honestly with utter conviction and not a hint of sarcasm: mainly because those idiots couldn’t have foreseen sunshine after dawn on the days after, much less China’s growth to become a global power. Back then China was backward, and couldn’t project much besides lots of unskilled grunts very much further than its geographical neighbors. Now they are a global economic power, and are able to sail icebreakers past Alaska and cause all kinds of naval problems closer to home.

The United States and China clashed over the Panama Canal at the United Nations on Monday, with the U.S. warning that Beijing’s influence over the key waterway could threaten global trade and security and China calling U.S. accusations a pretext to take over the canal.

The clash took place at a U.N. Security Council meeting where Panama’s President José Raúl Mulino stressed the neutrality of the canal and his country’s ownership of the waterway linking the Atlantic and Pacific oceans.

There is some basis to US claims – I read some time ago that China Overseas Shipping Company, a state-owned shipping conglomerate, had invested substantial amounts in the ports at either end of the Panama Canal. Want to know how ubiquitous COSCO is? Next time you see a picture of a container ship or a train going by loaded with containers, try to count how many have COSCO painted on the sides.

The Trump administration has pressured China to have the Hong Kong-based operator of ports at either end of the canal sell those interests to a U.S. consortium that includes BlackRock Inc.  Military.com

BlackRock is trying to buy those facilities at the sea ends of the Canal for $22.8 billion, a large chunk of change, from Hong Kong-based CK Hutchison. China is threatening to block the deal unless COSCO has a 20% stake in the proceedings.

CK Hutchison had announced in March that it would sell its 80% stake in the ports business. The deal covers 43 ports across 23 countries. In May, Hutchison confirmed that Swiss company Mediterranean Shipping Company (MSC), controlled by Italian billionaire Gianluigi Aponte’s family, had emerged as the main investor in the group planning to buy the business.

Per reports, BlackRock, MSC, and Hutchison are all open to including Cosco as a partner to move the deal forward.

If the deal is finalised, MSC is expected to become the largest port terminal operator in the world. BlackRock is expected to take over the two Panama ports specifically, while MSC will control other terminals globally.  Marine Insight

Category: Government Incompetence, None, Politics