China Promoting South American Transcontinental Railway Project as Panama Canal Alternative
Since Sec. of State Rubio reminded Panama of its treaty obligations, BlackRock purchased Hong Kong’s canal ports and its traffic has surged.
When I last reported on the Panama Canal, the nation had launched an audit of the Panama Ports Company.
In the early days of President Donald Trump’s second term, Secretary of State Marco Rubio was clear about the terms of the treaty we have with Panama. The agreement includes the right to defend the critical waterway between the Pacific and Atlantic oceans from any threat that might interfere with its continuation of neutral service.
Within a month of this reminder, Hong Kong’s CK Hutchison Holdings sold its Panama ports to an investment group led by U.S. asset management firm BlackRock.
The two ports are the Panama Canal’s largest and – according to the Panama Maritime Authority – accounted for 39 percent of the cargo that passed through the canal in 2024.
In recent months, the ports had become a source of tension between the United States, Panama, and China after U.S. President Donald Trump alleged that they represented China’s control of the Panama Canal.
The BlackRock-TiL consortium, which will buy the ports from CK Hutchison subsidiary Hutchison Port Holdings, is made up of BlackRock and Terminal Invesment Limited (TiL), which is owned by MSC, the world’s largest container company. The deal, worth USD 22.8 billion (EUR 20.4 billion), will give BlackRock-TiL a 90 percent controlling stake of Hutchison’s Panama facilities, as well as an 80 percent controlling stake in a further 43 global ports currently controlled by Hutchison.
Now China is angling to create a South American Transcontinental Railway as an alternative to the Panama Canal. China recently signed an agreement with Brazil for a feasibility study to connect Brazil’s Atlantic Ocean coast to Peru’s Pacific Ocean port of Chancay.