CK Hutch ports sale can be good for Beijing too

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Li Ka-shing's ports deal is shrewd in all respects except for the timing. Beijing has warned the Hong Kong tycoon's CK Hutchison HKEX:1 against bypassing its antitrust probe on the $23 billion disposal to a group including BlackRock NYSE:BLK and Swiss-Italian shipping giant MSC. Officials may want to use the assets as leverage in U.S. trade talks. Poor timing aside, China has good reason to like this sale.On Sunday, China's antitrust watchdog sent a rare warning to the Hong Kong group and potential buyers on changing the terms of the sale without its approval. Earlier this month, the Wall Street Journal reported that two Panama port assets - which emerged as a geopolitical lightning rod between Washington and Beijing - may be carved out from the rest of the deal, according to unnamed sources. The official warning effectively scuppers any attempts to fast-track the transaction spanning 43 ports in 23 countries.Blame the unfortunate escalation on U.S. President Donald Trump's trade war with China. After unveiling the deal in March, CK Hutchison had hoped to sign "definitive documents" regarding the Panama disposal by April 2. That date coincided with Trump's infamous Liberation Day when he unleashed a barrage of tariffs on U.S. trading partners including China, which now faces additional levies of 145%. No wonder state-linked newspapers accused the Li clan of betraying Chinese national interests. Intriguingly, CK Hutchison shares have given up large gains but remain 11% above their pre-deal price, while the benchmark Hang Seng index HSI:HSI has fallen, implying investors think at least part or all of the transaction could go through sooner or later. There are good reasons for this enduring optimism. First is that BlackRock and MSC are exactly the type of foreign investors Beijing wants to court. Both have strong ties with the country and are heavily invested in China's economic growth. Funds of BlackRock, which in 2021 became the first foreign asset manager to receive a licence to operate a wholly-owned onshore mutual fund business, own more than 5% in 89 listed firms in Hong Kong, ranging from Alibaba NYSE:BABA to Bank of China SSE:601988. Similarly, MSC has 28 offices in China; late last year, it placed a $2 billion order with Chinese shipyard Rongsheng, per TradeWinds.Moreover, there aren't that many willing buyers for such a diverse portfolio. A Chinese...

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