The Chinese Are Not Happy With CK Hutchison

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The Chinese are not happy with CK Hutchison currently as this is not good for the Chinese brand losing ownership of controlling infrastructure in the west. The Ports are a big deal for trade and the Chinese own the majority of them globally. Those they do not own they manage or have a small share holding with the hope of owning them outright.

I am sure many of you have seen the news that the Chinese Government has stepped in to prevent the sale to Black Rock regarding the two ports linked within the Panama Canal system. The US Government has said Panama is in breach of their agreement by allowing China full control and this is only proving how correct they were.

The deal of roughly $19 billion plus is not just for the 2 Panamanian Ports, but incudes 43 Ports in 24 countries. The Chinese will not allow this deal to happen as they want world trade dominance and signing over 80% to Black Rock and MSC goes against their main objective being world trade dominance. This deal gets those countries who off loaded their Ports to the Chinese a get me out of jail card and this is being pushed through by the US government and is far bigger than just Panama.

The press don't give you the full picture and it is all about Panama yet there are 41 other Ports involved in this deal. If it was just Panama I do not think the Chinese would be that upset, but this is more about the others on the list.

I first stumbled on the name CK Hutchison a few years ago being the owner of Felixstowe Port in the UK. At first glance it does not sound like a Chinese name because of the Hutchison part, but the CK stands for Cheung Kong and is very much Chinese. The UK trade is run by the Chinese as they control the UK's biggest hub for imports and exports.

CK Hutchison is like a mini Black Rock representing Chinese interests around the world. The company employs nearly 300K across 50 countries with a portfolio from container terminals, port control, infrastructure companies like telecoms and even retail which includes health and beauty. They operate 16 300 retail outlets in 24 countries owning brands such as Superdrug, Kruidvat, Park'n Shop, The Perfume Shop and the list goes on and on.

The Ports however is what this story is about because whoever owns the major shipping hubs around the world controls and influences world trade. The Chinese owning strategic shipping hubs is no coincidence and this has been part of their agenda since the 1990's. In 2005 CK Hutchison controlled roughly 9% of the world container business handling 33 million containers. Last year they handled 90 million so you can see the company has grown nearly 300%.

Countries over the years have allowed the Chinese to invest in areas where one would think countries would want their own controls. This process starts off with buying the shipping berthing rights and in no time this escalates and they own and control your port. You would wonder where all the money comes from for these large investments and you would have to be ignorant to think this is not being funded directly from Beijing. These are not public companies with share holders so the money has to come from somewhere else.

In 2016 they owned or had investments in 48 ports globally and 9 years later they now have 55 ports under their control. The problem is what Ports they have control and they are not minor, but major ports. 55 is a big number especially when you consider the trade that passes through these Ports is all controlled by the Chinese. They could screw up a countries economy very quickly if they chose to.

100% control/ownership

Amsterdam Container Terminal
Barcelona
Brisbane
Duisburg Container Terminal (Germany)
Felixstowe (UK)
Harwich (UK)
Jazan (Saudi Arabia)
Stockholm (Sweden)
Sydney (Port Botany)

I think more concerning is their influence in Rotterdam with 3 areas they own majority ownership

Port of Rotterdam ECT Euromax 45% , ECT Delta 89.7% and ECT Delta 2 60.78%. This is a major transport and container hub yet they have been allowed to control this facility.

There are numerous other port installations around the world where they have controlling shares like the Bahamas, Malaysia, Singapore and Panama. They have two controlling interests in Panama with the Port of Cristobal and the Port of Balboa where they own 80%.

The last two are what is in the news currently with Black Rock having offered $23 billion to buy them out now being rejected as CK Hutchison is being told what to do by their Chinese government. The deal includes 41 other Ports world wide and not just Panama. This obviously does not align with the interests of the Chinese as they are happy to control port facilities globally as this gives them the upper hand and more importantly major influence with world trade. The US is fully entitled to take the Panama Canal back due to the agreement not being adhered to and if they can swing a deal getting other ports out of Chinese control then that would be fantastic.

When you throw in another Chinese heavyweight like COSCO shipping who own 25% stake in 15 other Ports in Europe these are not good signs. These are economic and security risks as these ae not normal shipping companies like Maersk or Hapag Lloyd who have investors COSCO and CK Hutchison are tools used by the Chinese to bring more controls and influence. The trade controlled by the Chinese offers an unfair playing field and gives them the upper hand over everyone else as they control the containers, the container terminals and the Ports.

Posted Using INLEO