China's Hong Kong and Macau Affairs Office on 3/2 criticized the Panama Supreme Court's ruling, which stripped Hong Kong company CK Hutchison of its operating rights for two major ports at both ends of the Panama Canal.

Beijing stated that the ruling "lacks legal basis", adding that Panama is damaging its own reputation and will suffer significant harm to its business environment. China also asserted that this move severely undermines international trade rules.

"The Panamanian authorities' insistence on upholding the ruling despite concerns is akin to shooting themselves in the foot", the Hong Kong and Macau Affairs Office warned.

Container ships operating in Panama on 30/1. Photo: *Reuters*

The office added that CK Hutchison's port operating contract at the Panama Canal had been in effect for nearly 30 years since its signing. The Panamanian authorities had confirmed both before and after the contract renewal that the project "substantially complied with the contract terms" and "fully fulfilled its contractual obligations".

"If the Panamanian authorities continue to act in this manner, they will certainly pay a heavy political and economic price", the Hong Kong and Macau Affairs Office declared, without providing specific details.

The Panama Supreme Court on 29/1 ruled that the laws and foundational documents for the concession contract between the Panamanian government and Panama Ports Company (PPC) concerning the construction, development, operation, and management of two terminals at both ends of the Panama Canal were "unconstitutional".

PPC, a subsidiary of CK Hutchison, signed these contracts with the Panamanian government in the 1990s, allowing it to operate the Balboa container port at the Pacific end of the canal and the Cristobal port at the Atlantic end.

The agreement was automatically renewed in 2021, allowing PPC to operate these two strategic ports for an additional 25 years. However, US President Donald Trump recently pressured Panama to limit China's influence and increase US control over the canal.

Shortly after Trump took office, the Panama Auditor General on 20/1/2025 initiated an audit of PPC. Panamanian officials claimed that the concession contract generated 3,78 billion USD for the operator of the Balboa and Cristobal ports from 1997 to 2023, while the Panamanian government only received 236 million USD.

PPC rejected these audit results, stating that it had invested over 1,8 billion USD in infrastructure at the two ports and had complied with its contractual obligations. Nevertheless, the Panama Supreme Court's ruling stripped PPC of its operating rights for the two strategic ports. The company announced it might pursue legal action to appeal.

Ngoc Anh (According to *SCMP*, *Nikkei*, *Straits Times*)