Hong Kong billionaire Li Ka-shing is squarely in the middle of the latest geopolitical conflict thanks to his port assets in Panama. Following threats made by U.S. President Donald Trump to take over the Panama Canal from Chinese control, Li decided to sell his controlled assets at this strategic key spot for $19 billion. While the proposed transaction once again demonstrated Li’s so-far-successful risk-aversion strategies over geopolitical changes and conflicts, the act has irritated many in Hong Kong and Beijing.
Last week, the Chinese Hong Kong and Macao Affairs Office reposted two articles published by Hong Kong-based media Ta Kung Pao. The articles accused Li and his company, CK Hutchison, of kneeling down to U.S. hegemony and blatantly ignoring Chinese national interests. Two days later, the Chinese government agency responsible for Hong Kong and Macao affairs endorsed the message from Ta Kung Pao again, accusing Li of betraying China. The Ta Kung Pao article reposted by Beijing declared: “Great entrepreneurs are never cold-blooded speculators seeking profit, but passionate and proud patriots!”
Former Hong Kong Chief Executive Leung Chun-ying also chimed in on Facebook, claiming that business people should remain loyal to their countries. The Hong Kong and Macao Affairs Office reposted Leung’s critical comments.
In addition to media criticisms, government officials in Beijing and Hong Kong have also weighed in on the issue and threatened to take regulatory actions against Li’s companies. Current Hong Kong Chief Executive John Lee pledged to review the deal, while China is reportedly starting an investigation against Li over the Panama port deal. Through a communications campaign with media articles and government actions, China is portraying Li as a traitor for divesting his assets amid rising geopolitical risks and even military threats from Trump to take back the Panama Canal.
China’s latest actions and government propaganda follow a pattern of demanding that nationalism be the deciding factor in business decisions. Instead of focusing on diplomatic efforts to negotiate with the Trump administration, China decided to go after a weaker target: a business facing geopolitical challenges in the two largest economies in the world. Instead of advocating for Li and CK Hutchison, the Chinese officials believe that businesses originating from China should make sacrifices for the sake of Chinese national interests. From using maps that support Chinese sovereignty claims to forcing Chinese businesses to make decisions against their own interests for the benefit of the regime, the Chinese government frequently demands that businesses prove their political loyalty.
This is not the first time that the Chinese government has pressured China-based firms to act in ways that go against their financial interests.
Since 2010, Chinese telecommunication business Huawei has invested in Canada to establish 5G technologies and expand its market to developed economies. Despite criticisms over national security concerns, the Chinese-owned company remained productive, receiving funding from the Ontario provincial government in 2016 and partnering with Canadian telecommunication company Telus in 2017. Yet most of these efforts vanished after the arrest of Huawei’s Chief Financial Officer Meng Wanzhou in 2018 and the subsequent detention of Canadian nationals Michael Kovrig and Michael Spavor. In 2022, the Canadian government officially banned Huawei from its 5G network and requested that existing equipment and services be removed by June 2024. The government further restricted Canadian businesses from using Huawei services for 4G networks with a removal deadline by the end of 2027. As geopolitical struggles between China and Canada escalate, Huawei is seeing a significant loss over its decade-long investment in Canada.
Similar to Huawei, TikTok and its parent company ByteDance also face headwinds in its operations in the United States. The popular mobile application was banned twice: by the first Trump administration in 2020 and then by legislation passed in the U.S. Congress in 2024. While the Chinese company was offered the option to sell its assets in the United States, the Chinese government made those transactions difficult to complete, essentially considering TikTok a national asset that it would rather see scrapped than sold for a profit to a U.S. firm.
Chinese businesses caught in the China-U.S. competition thus have no strategic partner that would advocate for their interests. While risk aversion would be the best option from a financial perspective, the Chinese government is putting heavy roadblocks on that path in the name of demanding political loyalty.
The Chinese government continues to show a contradictory approach to its private sector businesses. While the Chinese economy relies on the private sector to maintain employment rates and economic growth, the Chinese leadership team remains skeptical of Chinese businesses’ reliability and political loyalty. The Chinese authorities tend to put up hurdles, barriers, and threats against businesses to control them, rather than providing solutions or efforts to ease possible political tensions. The regime clearly prioritizes its political stability over economic interests.
While the Chinese regime continues to strengthen its controls over businesses in the country, such a policy approach has led to major missed opportunities to advance Chinese geopolitical interests in trade, security, and economic development. The past and current U.S. administrations led by President Donald Trump utilize tariffs against traditional allies and disrupt U.S. security and military alliances. While the tariffs have certainly irritated countries such as Canada, France, and other impacted nations in the European Union, the growing combative approach adopted by China makes it difficult for democratic developed economies to strengthen ties with the increasingly authoritarian regime in Beijing. And with the Chinese Communist Party demanding to control all facets of Chinese life – “Party, government, military, civilian, and academic” – it’s increasingly difficult to have any exchanges with China that aren’t directly under Beijing’s thumb.
With its growing influence on even private Chinese businesses, China has undermined its own position amid the latest geopolitical changes in the second Trump administration era.