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CK Hutchison eyes 'major' Chinese investor for Panama ports deal

CK Hutchison eyes 'major' Chinese investor for Panama ports deal

CNA3 days ago
HONG KONG: Hong Kong conglomerate CK Hutchison said Monday (Jul 28) it was considering inviting a Chinese "major strategic investor" to join a United States-led consortium negotiating the sale of its global ports business outside China, including operations at the Panama Canal.
The firm said in March it was offloading the ports - including operations in the vital Central American waterway - to a group led by asset manager BlackRock for US$19 billion in cash.
The consortium was to include BlackRock subsidiary Global Infrastructure Partners and Terminal Investment Limited, a subsidiary of the Mediterranean Shipping Company.
A Hutchison subsidiary has operated ports at both ends of the Panama Canal since 1997.
The sale was seen as a political victory for US President Donald Trump, who had vowed to "take back" the Panama Canal from alleged Chinese control, prompting Beijing's ire.
China's market regulator said in March it was reviewing the deal.
In May, Hutchison co-managing director, Dominic Lai told shareholders that Terminal Investment was the main investor. Its parent company is led by Italian shipping scion Diego Aponte.
Aponte's family reportedly has a longstanding relationship with the owner of CK Hutchison Li Ka-shing, who is also Hong Kong's richest man.
"(CK Hutchison) remains in discussions with members of the consortium with a view to inviting (a) major strategic investor from (China) to join as a significant member of the consortium," CK Hutchison said in a stock exchange filing Monday.
The firm added that changes to the consortium's membership and deal structure will be needed for the deal "to be capable of being approved by all relevant authorities".
It said the "period for exclusive negotiations" mentioned in the March announcement had expired, but discussions will continue.
It did not name the major investor. The deadline for their exclusive negotiation period ended on Jul 27.
China's biggest shipping company Cosco was set to join the consortium and was requesting veto rights or equivalent powers, Bloomberg News reported.
Bloomberg Intelligence analyst Denise Wong told the outlet that "ongoing negotiations and the reported inclusion of Cosco Shipping in the consortium have likely eased concerns over Chinese regulatory hurdles, strengthening investor confidence in the deal's viability".
Gary Ng, senior economist for Asia Pacific at Natixis, said Monday's developments show that "business deals can be increasingly subject to politics in the new economic and geopolitical reality" as the Hong Kong conglomerate seeks to "keep everyone happy".
CK Hutchison said it "intends to allow such time as is required for such discussions to achieve" a workable arrangement.
It said it had stated on several occasions that it "will not proceed with any transaction that does not have the approval of all relevant authorities".
The initial deal, valued at nearly US$23 billion including US$5 billion in debt, would have given the consortium control over 43 ports in 23 countries, including the ports of Balboa and Cristobal, located at either end of the canal. That agreement also required approval from Panama's government.
Its Hong Kong-listed shares fell 0.6 per cent Monday, while Cosco dropped 2.2 per cent.
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Commentary: Why students from China are picking Malaysia over traditional destinations
Commentary: Why students from China are picking Malaysia over traditional destinations

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Commentary: Why students from China are picking Malaysia over traditional destinations

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RESTRICTIVE IMMIGRATION POLICIES AND GEOPOLITICAL TENSIONS First, the shift towards more restrictive immigration stances in the 'big four' study destinations (Australia, Canada, the UK and the US) is making them less attractive to Chinese students. This shift is evident in new initiatives such as capping international student numbers, increasing visa costs, imposing stricter student dependent rules, and limiting access to post-study work visas. This situation is exacerbated by funding cuts in these countries' higher education sectors, which reduce their attractiveness to international students through fewer scholarships, and a less vibrant research and study environment. The rise of Sinophobia in some of these destination countries, especially during and after the COVID-19 pandemic, has also led to safety and security concerns on the part of prospective Chinese students and their families. Second, the current geopolitical climate, with rising China-US tensions and worsening bilateral relations between China and some traditional study destinations, has contributed to declining Chinese student mobility to these countries. In the US, it has been observed that universities have become extensions of political power. Indeed, Proclamation 10043 (Proclamation on the Suspension of Entry as Non-immigrants of Certain Students and Researchers from the People's Republic of China), signed by US President Donald Trump in May 2020, suspended and limited the entry of Chinese students associated with China's military and high-tech agenda. In 2023, the US rejected a record high of 36 per cent of Chinese student visa applications. Chinese student enrolment in US higher education institutions dropped 25 per cent from 372,532 in 2019/20 to 277,398 in 2023/24. 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The presence of Malaysian Chinese communities (third or fourth generation overseas Chinese) means that Malaysia offers a soft landing for Chinese students who may be living overseas for the first time. Some Chinese students may have family connections in Malaysia, which constitute additional assurance to their parents. Chinese students can take advantage of a shared language (Mandarin and the use of simplified Chinese characters) and dialects, food, and sociocultural practices. Malaysia thus offers an international yet familiar environment – a comfortable home away from home. Malaysian higher education institutions' favourable positions in global university rankings are also a major draw. Another attractive factor is the relatively more affordable tuition and cost of living in Malaysia. In addition, the geographical proximity and the availability of affordable flights between Malaysia and Chinese students' home cities enable frequent home visits. 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Given this trend, Malaysia's higher education institutions must be prepared for the influx of Chinese students and their study abroad needs such as English language support, social integration and career guidance by investing in additional manpower, resources and infrastructure.

Commentary: Why China is finally starting to acknowledge its overcapacity problem
Commentary: Why China is finally starting to acknowledge its overcapacity problem

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Commentary: Why China is finally starting to acknowledge its overcapacity problem

LONDON: For years, Beijing dismissed Western concerns about Chinese overcapacity as protectionist rhetoric. When the United States and European Union complained about cheap Chinese exports flooding global markets, China's response was predictable: These were simply competitive advantages in a free market economy. That narrative has now fundamentally shifted. In a remarkable policy U-turn, China has not only started acknowledging the overcapacity problem but is treating it as a national priority that requires urgent intervention. While there have been signs of this narrative change for a while, the clearest signal of this messaging transformation came through recently on China's own policy channels. In July, the Communist Party's leading journal Qiushi warned that "disorderly competition has destroyed entire industry ecology". This wasn't diplomatic language about market dynamics – it was an admission that destructive competition had reached crisis proportions. Around the same time, President Xi Jinping chaired a meeting of the Central Financial and Economic Affairs Commission, calling for "low-price competition to be regulated" and outdated production capacity to be "phased out in an orderly manner." Weeks later, the State Council explicitly linked "irrational competition" to weak domestic economic circulation, naming high-profile sectors like new energy vehicles as targets for immediate oversight. This represents a dramatic departure from China's previous stance. Where Beijing once celebrated its manufacturing prowess and export competitiveness, it now openly discusses the need to curb "involution" – or neijuan, the Chinese term for excessive and destructive internal competition that has become central to policy discourse. WHY THE CHANGE? The shift reflects a sobering recognition that China's industrial overcapacity has moved beyond an export problem to become a domestic economic threat. The cost of some raw materials has reached historic lows due to supply chain deflation, yet factory prices are being cut even further as manufacturers engage in suicidal price wars. The result is unsustainable profit margins that are forcing many manufacturers to suspend operations entirely. This deflationary spiral now threatens what Chinese leadership calls the "whole-chain manufacturing model" – the integrated production networks that Mr Xi recently reaffirmed as a national priority. When factories cannot operate profitably, the entire industrial ecosystem becomes vulnerable. The messaging change also reflects Beijing's broader strategic recalibration. As China faces mounting external pressure and talks increasingly about economic self-reliance, maintaining a healthy domestic industrial base has become a matter of national security rather than just economic efficiency. FRAMING THE PROBLEM AS PRICE WARS Importantly, China is not using the language of "overcapacity" that has dominated international criticism. Instead, Beijing frames the problem as "price wars" and "disorderly competition". This distinction matters because it allows Chinese policymakers to address the underlying issue while avoiding the admission that their industrial policy created systemic overproduction. By focusing on pricing behaviour, China can position itself as promoting fair competition rather than acknowledging fundamental structural imbalances. This semantic shift enables policy action without losing face internationally or undermining confidence in China's economic model. However, the practical effect may be similar. Whether addressed as overcapacity or predatory pricing, the solution requires reducing output, consolidating industry players, and restoring sustainable profit margins across key sectors. 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As Mr Xi recently acknowledged at a Central Urban Work Conference: "When it comes to launching new projects, it's always the same things ... Should every province in the country be developing industries in these areas?" BETTER LATE THAN NEVER? But those seeking immediate results may be disappointed. China's approach appears to favour gradual consolidation and regulatory discipline over dramatic market interventions. This methodical approach reflects the political complexity of dismantling entrenched local interests. For global markets, China's acknowledgment of its overcapacity problem should be welcomed, albeit cautiously. If Beijing can successfully curb destructive price competition, it could lead to more stable global commodity prices and reduced trade tensions. Sectors like solar panels, steel and electric vehicles might see healthier profit margins as Chinese producers focus on sustainable competition. The shift also signals China's evolution toward a more mature economic model – one that prioritises long-term industrial health over short-term market share gains. Whether this transformation succeeds will depend on Beijing's ability to overcome local resistance and implement the structural reforms necessary to address decades of misaligned incentives. China's messaging U-turn on overcapacity may have come late, but it represents a crucial first step toward addressing one of the global economy's most persistent distortions. The real test now is whether shifting rhetoric will translate into meaningful action.

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