Who Holds the Gateway to the Canal? China, the United States, and Panama Compete Over $22.8 Billion

The Tug-of-War over the "Gateway to the Panama Canal" Enters the Next Phase

On December 16, 2025 (local time), it was reported that a large-scale transaction involving approximately $22.8 billion, including port interests around the Panama Canal, has been strongly pulled back into the "gravity of geopolitics." The Wall Street Journal reported that negotiations have stalled as China seeks to give state-owned shipping giant COSCO a "controlling stake," and investment information sites conveyed this as a Reuters dispatch. Investing.com

The key point this time is that China's demand has shifted from wanting to "participate" to wanting to "lead." According to reports, the buyers (BlackRock and MSC) were initially open to giving COSCO an "equal share," but the new demand from the Chinese side (majority and effective control) has hit a snag. Investing.com

What is the transaction about: BlackRock x MSC targeting "over 40 ports worldwide"

The foundation of this deal is the sale of international port assets by Hong Kong-based conglomerate CK Hutchison to the BlackRock group. As reported in March 2025, the transaction includes numerous port interests worldwide, including a 90% stake in Panama Ports Company, which operates Balboa and Cristobal ports (on the Pacific and Atlantic sides of the canal). Reuters

Combined with this is MSC's (Mediterranean Shipping Company) terminal operating company TiL. The transaction is massive in both scale and impact, as it involves financial (BlackRock) and actual shipping operations (MSC) jointly controlling ports, the "arteries" of logistics. Reuters

Why is China fixated on "control"?

From the reports, China's logic can be interpreted in three main ways.

(1) Practicality: Ports are devices that can create "priority" rather than a "rate sheet"
Ports are not just real estate. They can adjust the friction coefficient of the supply chain through berth allocation, cargo handling priority, storage, and customs operations. If a nation wants to ensure "shipping certainty," effective control is more beneficial than being a minority shareholder.

(2) Negotiation card: The transaction itself is an extension of US-China negotiations
The WSJ also touches on movements to make "port control" a point in broader trade and tariff negotiations. In other words, ports are becoming "tangible collateral" for economic security. The Wall Street Journal

(3) Domestic governance: A message not to "freely allow" Hong Kong companies to sell overseas assets
CK Hutchison is a Hong Kong company within China's sphere of influence. The market has repeatedly speculated that resistance to large assets ending up entirely within a "US-led framework" could easily manifest as regulatory or political pressure. Reuters

Why is the US sensitive: It's not about "the canal itself" but "the surrounding infrastructure of the canal"

It is often misunderstood, but the issue is not "who owns the Panama Canal." The canal is operated by Panama, and the navigation framework is separate. However, "whose influence the major ports at both ends of the canal are under" directly impacts logistics operations.

The WSJ reports that White House officials have indicated that "Chinese control is unacceptable." The Wall Street Journal
Furthermore, multiple media outlets reported in March that the Trump administration viewed Chinese influence as problematic, with political pressure as a backdrop. Reuters

In essence, from the US perspective, having a Chinese state-owned enterprise control the ports directly ties into "national security issues." This is why it doesn't end as a pure M&A transaction.

It's not just about "buyers and sellers": Domestic factors in Panama and regulatory chains

This case does not close with just the agreement of the parties involved.

• Political and legal risks in Panama : In July 2025, Reuters reported that a Panamanian auditor filed a lawsuit over CK Hutchison's port operation contract, potentially shaking the very premise of the transaction. Reuters

• Competition authority risk : It has also been reported that the EU is investigating BlackRock x MSC from a competition law perspective in a separate case (acquisition of a terminal in Barcelona), suggesting increased regulatory scrutiny on global transactions. Reuters

Viewed this way, it's a "polyhedral case" involving not only "China's demands" but also "domestic procedures in Panama," "European competition policy," and "US security perspectives."

Reactions on social media: The debate splits into three

On social media, reactions to the reports are significantly divided. The typical responses fall into the following three categories (summarized based on representative posts and discussions).

1) The "China used its 'blocking power' to negotiate" camp

On X, alongside the spread of the WSJ scoop, there is a noticeable view that "China has used its position to stop the deal and raise conditions." Posts emphasizing the "majority demand" by news accounts have strengthened the impression that the negotiation is directly linked to security. X (formerly Twitter)

2) The "Control of ports equals control of logistics. It's only natural" camp (industry and investment perspective)

On LinkedIn, in the context of port and infrastructure investment, there are explanations like "COSCO's demand for shares is geopolitical leverage" and "a 'seat' for the Chinese side is necessary to overcome regulations." There are many posts that handle the demand calmly as a condition for establishment rather than discussing its merits. LinkedIn

3) The "Again with BlackRock" and "It's dangerous for private giant capital to control key points" camp

On news sharing sites, the topic of ports easily ties into distrust not only as "interstate conflict" but also as "the influence of giant finance." On Hacker News, the provocative nature of headlines ("misreading of buying the canal") and the reality of ports often lead to critical discussions. Hacker News

Three potential scenarios that could unfold

Finally, let's organize the future developments by "likelihood."

1. Compromise: COSCO participates but does not hold a majority
   Settling with "equal shares" or limited authority. However, the WSJ report cites "majority plus veto power demand" as a sticking point, indicating a deep divide. The Wall Street Journal

2. Prolongation: A "race against time" spanning regulations and politics
   CK Hutchison has reportedly mentioned the possibility of completion being delayed to 2026, with endless reviews and adjustments continuing. The Wall Street Journal

3. Collapse and restructuring: Reorganizing with different buyers or structures
   If legal risks in Panama and the chain of regulations in various countries overlap, redesigning the sale conditions (such as asset separation) could be possible. Reuters

Powered by Froala Editor