A cargo ship passes through the Panama Canal Cocoli Locks on February 21, 2025 in Panama City.
Martin Burnetti | Martin Burnetti AFP | Getty Images
The Chinese government condemned the Panama Supreme Court’s ruling and warned that unless the Central American country changed course, “it is inevitable that it will pay a heavy price.”
The rebuke came shortly after Panama’s Supreme Court ruled that Hong Kong-based CK Hutchison’s license to operate ports at both ends of the canal was invalidated.
The ruling is seen as a major victory for the Trump administration’s security ambitions in the Western Hemisphere. The White House has made blocking Chinese influence over the Panama Canal one of its top priorities.
The Hong Kong and Macau Affairs Office of the State Council said in a commentary posted on its WeChat account on Tuesday that the “logically flawed” and “utterly ridiculous” ruling was opposed by the Chinese government and the Hong Kong Special Administrative Region government.
“Panamanian authorities should be aware of the situation and revise their policies,” the Hong Kong and Macau Secretariat said, according to Google Translate.
“If we stick to our ways and remain stubborn, we will pay a heavy price politically and economically!”
Panama’s Supreme Court said in a brief statement on January 29 that the terms under which Panama Ports Company (PPC), a subsidiary of CK Hutchison, operates the ports of Balboa on the Pacific coast and Cristobal on the Atlantic coast of the Panama Canal violate the constitution.
The ruling comes nearly a year after US President Donald Trump threatened to seize control of the Panama Canal, claiming it was “critically important to our country” and that it was “run by China.”
“Significant damages”
The Hong Kong and Macau Affairs Office’s comments reflect an escalation in tone from China’s initial reaction to the ruling.
A Chinese Foreign Ministry spokesperson said on Friday that the decision was “contrary to the law governing Panama’s recognition of the relevant franchises, and both companies reserve all rights, including legal proceedings.”
The Chinese government said it will take all necessary measures to protect the legitimate rights and interests of Chinese companies.
PPC, which has held the operating contract for the ports of Balboa and Cristobal since the 1990s, also said the decision was inconsistent with the relevant legal framework.
Aerial view of the Bridge of the Americas at the Pacific entrance to the Panama Canal next to Balboa Port in Panama City on January 30, 2026.
Martin Burnetti | Martin Burnetti AFP | Getty Images
Meanwhile, CK Hutchison announced on Wednesday that it has begun international arbitration proceedings against Panama after the country had its license to operate two ports on the Panama Canal revoked.
The company said in a statement that PPC will seek “substantial damages” over the ruling, but did not specify the amount sought.
CK Hutchison stock rose more than 2% on Wednesday. The company’s stock price has increased more than 23% since the beginning of the year.
