The Hong Kong and Macau Affairs Office said in a commentary on Tuesday that the ruling was “self-sabotaging” to Panama’s creditworthiness and would inflict profound damage on its business environment while severely undermining international trade rules.

“The Panamanian authorities’ insistence on this despite widespread concerns is tantamount to shooting themselves in the foot,” said the commentary, posted on the office’s WeChat account under the pen name “Gang Ao Ping”.

“The ruling is legally unfounded and rationally absurd, amounting to utter preposterousness. The Panama Canal port concession contract involving the Hong Kong enterprise has been in effect for nearly 30 years since its signing.”

The commentary added that Panamanian authorities had confirmed before and after contract renewals that the project had “substantially complied with contractual terms” and “fully discharged its contractual obligations”.

The commentary said: “Should [Panamanian authorities] persist in their course of action and remain obstinate, they will inevitably pay a hefty political and economic price.”