Panama Lawsuit Against Chinese Owner of Ports | China Investigates Nvidia

We're back to continue discussing the topic of Li Ka-shing. Li Ka-shing's sale of the port has triggered a huge geopolitical storm, which is something everyone has known for a while. Three days ago, on July 28th, Li Ka-shing's CK Hutchison Holdings Limited released a new announcement, stating that the exclusive negotiation period with the BlackRock-led consortium had expired. However, CK Hutchison stated that even though the deadline has passed, our company is still in discussions with members of the consortium. What are they doing? They're discussing plans to invite major strategic investors from mainland China to join and become key members of the consortium. To put it bluntly, they're basically preparing to allow Chinese state-owned enterprises to get involved. So as you can see, this is the most significant adjustment yet in Li Ka-shing's port sale deal. And the background to this adjustment is actually a Bloomberg report from July 22, which was something of an exclusive, saying that the Chinese state-owned enterprise COSCO Group is about to join the global consortium acquiring Li Ka-shing's overseas ports, and is demanding veto power in the entity that will take over the ports. In other words, to put it plainly, the CCP wanted to pull off a classic move of swooping in halfway and snatching the deal from under everyone ’ s nose. After this news broke, mainland Chinese media immediately started reporting that COSCO had happily secured a strategic chokepoint, painting a picture of celebration and triumph. But what no one expected was that, while the CCP may be ruthless, Panama isn ’ t exactly a pushover either. Just yesterday, Panama ’ s Comptroller General, named Flores, filed two lawsuits with Panama ’ s Supreme Court, demanding the cancellation of the contracts granting the Yangtze—specifically, a subsidiary under Hutchison Whampoa—the rights to operate two ports within the Panama Canal. Why is that? Flores explained that since 1997, Hutchison Whampoa has held the concession to operate these two ports, and in 2021, they signed another contract extending the operating rights for another 25 years. However, after Panama's Office of the Comptroller General began a detailed audit of the Panama Ports Company in January 2025, they found that this contract contained multiple unconstitutional or improper issues that did not align with the national interest. As a result, they filed a lawsuit demanding its termination. Moreover, Flores also stated that this transfer or cooperation deal, worth several billion US dollars, is being led by major powers, while sovereign Panama has been excluded from the process. Panama believes this is unreasonable, so they have decided to take action to defend Panama's national sovereignty and interests. So as you can see, Panama's statement is basically directed straight at the Chinese Communist Party, because the United States has n't really made any direct comments about the Panama Canal or the ports. In other words, with these two lawsuits, Panama is essentially pulling the rug out from under them. What does that mean? I ca n't be bothered to argue with you about share ratios or veto power. I'm going to directly revoke CK Hutchison's operating rights. Once you lose your operating rights, there's no question you can sell. All your arguing was a waste of time—like a blind man lighting a candle, pointless. That's what it means. Of course, I personally am highly suspicious that behind this move, it was actually the United States pulling the strings, because the timing is just a little too perfect. Everyone saw that the CCP had just managed to pressure Li Ka-shing and made some progress, right? That smug smile was still on their faces, had n't even faded yet, when Panama slapped them hard across the face. Without US backing, it's hard to imagine Panama, a Belt and Road member, would dare to so blatantly disregard the CCP. I suspect CK Hutchison Group was very cooperative with Panama's audit office during the audit. Panama wanted to reclaim operating rights to this business zone, and they had no real reason—just looking for an excuse. So Li Ka-shing might have thought,'Sure, I'll cooperate. If you're looking for trouble, I'd be happy for you to find something. What does that mean? Because for Li Ka-shing, this is like an opportunity to get rid of two hot potatoes—he's basically off the hook. Actually, it's not just two hot potatoes—we could even exaggerate a bit and say they're two burning potatoes. They're far more dangerous than just being hot. Of course, I think this can be considered the first major setback the Chinese Communist Party has faced. The second major setback comes from a decision made by Li Ka-shing himself, because just today, news about the Li Ka-shing family offloading 400 properties in the Greater Bay Area shot to the top of the trending topics on mainland Weibo. So, what's going on here? According to reports from mainland Chinese media, Hutchison Whampoa Properties, a subsidiary of CK Hutchison Holdings, suddenly started offloading more than 400 properties in four major developments—Huizhou Nongbo Garden, Zhongshan Nongbo Garden, Guangzhou Cuiyi Manor and Dongguan Harbour View Mansion—specifically targeting buyers from Hong Kong. Among them, the lowest total price is only about 400,000 RMB. The report takes Huizhou Nongbo Garden as an example: previously, a 51-square-meter unit was priced at 10,000 to 14,000 RMB per square meter, but now the price has been slashed significantly to just over 8,000 RMB per square meter. As for Haiyi Haoting in Dongguan, which is a villa targeting mid-to-high-end clients, its price used to be 44,000 to 68,000 RMB per square meter, but now it has been cut in half, and is only about 18,000 to 36,000 RMB per square meter. So, the reason why this news suddenly went viral and shot up the trending searches is because—because it touches on a highly sensitive point: Li Ka-shing is massively clearing out his real estate holdings in mainland China. And as everyone knows, whenever Li Ka-shing makes a move like this, it usually signals that a new round of turmoil may be on the way. Because whether or not you agree with Li Ka-shing as a person, right, when it comes to his ability to predict the political and business climate in China, his sensitivity and accuracy are pretty much unmatched. This has almost become the industry benchmark, a consensus within the business world. In other words, Li Ka-shing's withdrawal now represents the retreat of the Chinese Communist Party's economy—the two have become linked, and it's almost become an economic law. For the CCP, which is still trying to fool the public with things like the 15th Five-Year Plan, this is undoubtedly a heavy blow. What's interesting is that, just as Li Ka-shing is leading this wave of retreat, the CCP, which has already been exposed as'swimming naked,' is actually stabbing itself in the back. What does that mean? Because just today, the official website of the CCP's Cyberspace Administration released a major announcement, claiming that Nvidia's computing chips have been found to have serious security issues. Because of this, the Cyberspace Administration officially summoned Nvidia today, demanding that Nvidia explain the vulnerabilities and backdoor security risks in the H20 computing chips sold to China, and submit relevant supporting materials. So, what exactly do they mean by'backdoor security risks' here? What specifically are they referring to? Actually, the article itself gives an explanation, saying that some U.S. lawmakers have called for all advanced American chips exported abroad to be equipped with a so-called tracking and positioning function. Nvidia's computing chips already have mature technologies for tracking, positioning, and remote shutdown, which poses a significant security risk for China. If I use your American chips, and you install backdoors or tamper with them, of course that's a huge risk for me. The background information mentioned here is that in May of this year, a U.S. senator named Tom Cotton proposed a bill requiring the Department of Commerce to mandate that any AI chips subject to export restrictions must be equipped with a location verification mechanism. The purpose is to prevent the Chinese Communist Party from obtaining advanced American semiconductor products and technology through intermediaries. Even though Nvidia has publicly stated multiple times that it can not track what happens to its products after they are sold, it's clear that the Cyberspace Administration of China simply does n't believe Nvidia 's statements at all. So, many of you might immediately realize there's an issue here—it seems like a rather strange, even bizarre situation. Why do I say that? Because as everyone knows, it was originally Trump who banned the export of these H20 chips, and he even used this ban as a bargaining chip in the trade war with the Chinese Communist Party, right? You all still remember that, do n't you? It was only after the later negotiations between China and the US that the Chinese side proactively requested that the US relax its chip export ban on them. At the same time, Jensen Huang even personally assured Trump that exporting the H20 would n't allow the Chinese Communist Party to threaten America's leading position in the AI field. On top of that, Jensen Huang personally went to the mainland, showing off traditional Chinese clothing and his Chinese language skills. It was only after a lot of effort that the H20 was finally allowed back into the Chinese market. So why is it that right after Huang just left China, the very teacup used to welcome him was immediately knocked to the ground and even smashed to pieces? Some people believe that this is because the Chinese Communist Party thinks that the domestic chip, namely Huawei's Ascend chip, is already capable of replacing the H20. So, they feel there's no need for imported American chips anymore, and that's why they're using these underhanded tactics to take down Nvidia and clear the way for Huawei. But personally, I think this logic does n't really hold up, because if the CCP truly believes that domestic chips can completely replace the H20, then would n't Trump's ban on H20 exports actually play right into the CCP's hands? So why does the CCP still insist on lifting the ban on the H20 during trade negotiations? In fact, Huawei's Ascend chip, in certain aspects of performance and specifications, has indeed come close to or even reached the standards of the H20 chip. However, at present, this chip does not have the capability to fully replace the H20. The main reason is that Nvidia's chip, in terms of software ecosystem and compatibility, still has a clear advantage over Huawei's version. Moreover, the production capacity of the Ascend chip is currently very limited. This is important because the demand for chips at the H20 level is extremely high. Now that the H20 has been unbanned, it can quickly replenish inventory and help many companies and AI development enterprises overcome their upgrade bottlenecks. It also supports the large-scale needs of AI training and inference. Especially when it comes to inference, the performance of this H20 chip in inference is clearly much stronger than Huawei's Ascend chip. So, what this means is that the CCP went through a lot of trouble at the front door, negotiating and even using rare earths as a bargaining chip to get this in, but then at the back door, someone sabotaged it and tried to throw it out. This creates a contradiction. Why does such a strange contradiction happen? I think the most reasonable explanation is that internal power struggles are involved. Because if you look into it, you'll find that the head of the Cyberspace Administration is Zhuang Rongwen. This guy comes from a background in hydropower, and he worked in Fujian for a long time. He's widely recognized as one of Xi Jinping's old associates from Fujian, a hardcore member of Xi's inner circle. So, does everyone see what's really going on here now ? The State Council, which is responsible for negotiating with the United States, is clearly not being led by Xi Jinping at the moment, because their goal is to try to get the H20 included. But Xi Jinping's real confidant, the head of the Cyberspace Administration, wants to kick the H20 out. And you can see, this is actually just the surface, because why was Nvidia singled out? Nvidia's H20 chip is actually a symbol; it represents the Chinese authorities' attitude toward foreign companies—are you really welcoming them or not, right? The State Council is racking its brains to bring it in with the goal of increasing economic and trade ties with the United States. But now the Cyberspace Administration is secretly taking action to kick it out, with the aim of accelerating decoupling from the United States—it's completely the opposite. In other words, this allows all foreign businesses and companies to see what's going on. If even a company as essential and representative as Nvidia, whose products are in high demand, ca n't keep its place in the Chinese market—if just a little manipulation can drive it out—then there's no need to even mention other companies and businesses. Why is that? Because being tied to the U.S. benefits the anti-Xi forces in power, while decoupling from the U.S. actually benefits Xi Jinping, who is mired in crisis. In other words, this is essentially a showdown between two major paths: the reform and opening-up route and the so-called'great struggle' route—one representing the Deng faction, the other the Xi faction. It's actually a fairly representative battle between these two lines. Nvidia's H20 chip just happened to be the unfortunate fuse that was picked to ignite this battle. This is the real root cause behind this bizarre crisis . Of course, regardless of what everyone thinks or what different opinions there may be, we very much welcome friends to freely express their views. Next, due to time constraints today, there are actually still some messages about Beidaihe. As we mentioned earlier, some major European media outlets have brought up questions like whether Xi Jinping 's position is now unstable, and so on. We'll discuss this information with everyone in more detail at a later time. Uh, next, we'll move right into this week's member interaction segment. 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