Panama’s Supreme Court has ruled that contracts to operate two ports on the Panama Canal held by Panama Port Company (PPC), a subsidiary of Hong Kong’s CK Hutchinson, are unconstitutional and therefore void. The PPC, which is operated by Hutchinson, owned by billionaire Li Ka-shing, has been running the ports on either end of the Panama Canal since 1997. The ruling comes half a year after the validity of the ports was brought into question by then comptroller general Anel Flores.

The decision comes amid heightened geopolitical scrutiny over assets linked to the canal since US President Donald Trump began his second term. He has claimed multiple times that China controls the Panama Canal and talked of “taking it back”. A deal struck in 2025 aimed to see the ports sold to the US investment company BlackRock, but Beijing called the deal “despicable” and demanded that any sale by CK Hutchinson involve a controlling stake being given to its state-owned company Cosco. 

The status of that proposed deal—and Beijing’s caveat to include Cosco—is currently unknown. US President Trump has been very vocal about his desire to ensure the entire Western hemisphere comes under the US sphere of influence. At the same time, China has worked very hard for the past 20-30 years to build its influence in the Global South—including Panama. Behind the Supreme Court’s decision is another decision, and there appears to be three choices: bring the ports under national control, give them to the US, or give them to a Chinese state-owned company.

Not so long ago, it was the French President Macron, then the Canadian Prime Minister Carney, and this week we have the British Prime Minister Starmer in Beijing paying respects. And there are more world leaders to come. The backdrop to this procession of course is the United States, and Trump and the fundamental shift which Carney referred to in his groundbreaking speech at Davos in mid-January. The middle level countries such as the UK have to now start assuming that they have to fend for themselves and that means doing deals directly without the benefit of any protection or united backup. A perfect situation for expert players of the game “divide and rule”.

The precondition for Mr. Starmer’s visit, approval for the Chinese application for the construction of a massive new embassy in London at the site of the old Royal Mint, was made this month after years of wrangling. During Mr. Starmer’s visit, there have been a number of announcements regarding bilateral agreements, investments and changes to tariffs and market anccess including a better deal for whiskey imports to China. The underlying factor to the relationship in the case of the UK is that Chinese students form an important part of the international students in the UK, probably around a quarter, and the fees they pay are important for the maintenance of the UK university system. Every relationship with China has certain special elements to it, and for the UK there is the situation with Hong Kong, handed over to Beijing in 1997. There was an also an interesting legal case in London that was abandoned only a couple of months ago that related.

There is no doubt that navigating the geopolitical rapids these days is tricky for a country such as the UK and pragmatism in many cases is going to win out over principles. This is a worrying time globally from many perspectives, but it’s important to keep the channels of communication open, and particularly maintain and expand people-to-people grassroots interactions as much as possible between China and the UK, for instance. These are good things and to the extent that the Starmer visit encourages them that is all to the good. Also, the extent to which the Trumpists take note of the fact that the alliance that has been so supportive of the US since 1945 is crumbling could possibly be useful. In a strange way, it is an honor to be a witness to this transformational moment in world affairs.

Have a great weekend.

16 of China’s 31 provinces failed to meet their economic growth targets for 2025, reports Caixin. The figures demonstrate widening regional disparities even as the national economy expanded at a steady pace.

Guangdong, China’s largest provincial economy, grew 3.9% last year, missing its target of about 5%. In contrast, Jiangsu narrowed the gap with Guangdong, expanding 5.3% to reach a GDP of RMB 14.24 trillion ($2 trillion). Several other major provinces, including Shandong and Zhejiang, posted growth of 5.5% or higher, helping stabilize overall economic performance. 

At the other end of the spectrum, Liaoning recorded one of the sharpest slowdowns, with growth slipping to 3.7% last year. The deceleration was driven by a steep drop in investment and mounting pressure on traditional manufacturing as demand shifted toward new-energy industries.

China’s largest gold mining company Zijin Mining is acquiring Canadian miner Allied Gold in an all-cash deal valued at about C$5.5 billion (US$4 billion), reports the South China Morning Post. This is the first major cross-border transaction after Beijing and Ottawa recently reset ties after years of diplomatic strain.

Zijin Gold International, a Hong Kong-listed subsidiary of Zijin Mining, agreed to buy all issued and outstanding shares of Allied Gold for C$44 per share, according to a joint announcement on Monday.

The announcement follows Canadian Prime Minister Mark Carney’s recent visit to China–the first by a Canadian leader since 2017–during which he met President Xi Jinping. Carney said Canada was not pursuing a free trade deal with Beijing but was seeking to reduce its economic reliance on the US.

At least 70% of European companies operating in China were reviewing their supply chain strategies, reports the South China Morning Post, citing a survey from the European Chamber of Commerce. This comes in response to geopolitical tensions and Beijing’s opaque policymaking, which appears to set back the country’s globalization efforts, according to the survey.

324 corporate entities responded to the survey conducted by the Shanghai chapter of the EuroCham. The survey found that these firms aimed to strike a balance between cost efficiency and risk diversification, while building resilience in their supply chains.

According to Carlo Diego D’Andrea, the chamber’s vice-president in China and chair of its Shanghai chapter, security concerns around Chinese products or components made manufacturing in the country unattractive, particularly in so-called strategic sectors. A growing number of European businesses were setting up two separate supply chain systems—one for China and the other for the rest of the world—to bypass regulatory requirements on data and information technology systems, the chamber said in a report released on Tuesday.