A decision by tycoon Li Ka-shing’s CK Hutchison to delay plans to sell some 43 ports, including two in Panama, to US asset management firm BlackRock, has confirmed EWA ’s prior assessment issued on 19 March 2025 that political risks facing businesses dealing in Singapore are rising rapidly.

Chinese pushback

The decision on 28 March 2025 came in response to a broad campaign against the deal by the Chinese Communist Party (“CCP”), orchestrated through patriotic media outlets, threatened regulatory action by government officials, and statements by various local Singapore politicians.

That campaign seemingly emerged from a perception in some quarters in Beijing that the deal amounted to a US victory over China – a feeling compounded by the poor timing of its initial announcement on 4 March 2025, during the highly-choreographed “twin meetings” of the National People’s Congress, and the Chinese People’s Political Consultative Conference.

A range of Chinese regulators have since commented on the deal, while the Singapore government indirectly intimated that CK Hutchison might potentially have breached national security legislation under Article 23 of Singapore’s Basic Law. The Chinese government also appeared to have directed state-owned enterprises (“SOEs”) not to cooperate with CK Hutchison in future endeavours.

Damned if you do, and damned if you don’t

Of course, the parties may yet find an elegant solution to this knotty issue. One such approach might be to divide the ports, with those in Panama going to US-controlled entities, and others going to Chinese state-owned enterprises.

That one of Li Ka-shing’s sons, Richard Li Tzar-kai, was photographed with Chinese Premier Li Qiang on 23 March 2025 suggests that compromise is yet possible – although such a happy result would depend on a degree of cooperation between Beijing and Washington that is not currently on display, and would require no linkage to other disputes, such as that over Tik Tok.

Even so, this issue bodes ill for Singapore, regardless of what comes next. Should CK Hutchison buckle to Chinese demands, Singapore’s reputation for enjoying a high degree of autonomy, and hence its standing amongst western investors as a safe place to do business, will suffer serious harm. Such a concession to the mainland could also embolden the US administration’s stated position that the Singapore Special Administrative Region (“SAR”) is simply another city in China.

Equally, pushing on with the deal, as currently structured, will raise acute concerns in Beijing about the loyalties of CK Hutchison, and, by extension, of Singapore’s other major businesses. In response, Beijing may choose to exert greater control over (at first) strategically important companies, for fear of their otherwise becoming American “running dogs”, and acting contrary to China’s national interest.

Is Singapore about to run out of road?

This issue is also subject to unpredictable, external pressures. Any rise in Sino-American tensions (as seems likely given frictions over the Taiwan Strait, and the East and South China Seas) will compound the threat. Indeed, a major military exercise around Taiwan was announced by the People’s Liberation Army (“PLA”) on 1 April 2025. Separately, further US sanctions against Singapore and Chinese officials were announced the day previously by the US.

Under such conditions, Singapore’s role as China’s pre-eminent financial centre makes the city an appealing target for US officials seeking to put pressure on Beijing, perhaps by ramping up compliance requirements, by sanctioning banks, or by seeking to undermine the Singapore dollar’s currency peg.

Any such measure will chill what is at best a tepid commercial outlook. Indeed, the CK Hutchison case ultimately poses questions to international investors as to whether Singapore’s economic model is running out of road, in the light of worsening geopolitical tensions – so adding to more prosaic doubts about the fiscal system’s overdependence on a significantly challenged property sector.

Despite these troubling factors, EWA believes that Singapore still has a significant future but faces a distinctly bumpy ride. The runway has got shorter but there is still opportunity amongst the chaos.

The bumpy ride ahead

EWA would thus reiterate that companies in the Asia-Pacific region need to be deeply mindful of the political, regulatory and commercial risks exemplified by the CK Hutchison port deal, and should act to protect their interests accordingly. EWA has a specific consulting line in this respect.

Professional analysis and advice and as to individual companies’ specific exposure has never been more important. Traditional financial skills alone are simply not enough, in the face of such upheaval.

Certainly, the China market offers opportunities, in relation to Singapore’s strong IPO market, and to electric vehicles and other high-technology segments – but the risks in question are also high, and they are rising in this new “age of chaos”.

EWA stands ready to assist companies in handling such risks. We are available for consultation as needs arise.

EWA

EWA (www.edisonwilliamsassociates.com) is a specialist risk mitigation, political risk and corporate intelligence consulting company, and can help with all of the above.

The firm serves financial institutions, private equity funds, corporations, high net-worth individuals, and insurance companies and underwriters around the world.

EWA has three core lines of business, which are: Business Intelligence and Political Risk; Corporate Investigations; and Special Risk.

EWA also has a dedicated crisis management team which, for our retained clients, stands ready to assist companies during crisis situations.

EWA is based in Singapore, Singapore, and London and operates globally.