PANAMA -- (AFP) -- Charges that China could cut off traffic through the Panama
 Canal because a Hong Kong-based group controls ports at either end of the
 waterway originated with a rival firm, said a top official from the group, Hutchison
 Whampoa Ltd.

 U.S. conservatives have charged that Panama Ports Co., a subsidiary of
 Hutchison Port Holdings, is a front for communist Chinese penetration into Latin
 America.

 Hutchison Port Holdings is the port component of the Hong Kong-based
 Hutchison Whampoa, a vast conglomerate that includes a hotel chain,
 supermarkets, bridges, cellular phones and a radio station.

 Hutchison Port Holdings chief John Meredith said the story first surfaced in 1996,
 when his company won a 25-year lease to operate sites in Panama.

 Hutchison is investing $250 million to build a cargo transshipment hub on the
 Pacific side of the canal, and a small cargo site and a port for tourist ships on the
 Atlantic side.

 ``We don't have ships or containers or direct involvement with the movement of
 ships through the canal,'' Meredith said. ``We don't even have Chinese employees
 in Panama.''

 He called charges of communist control of the firm specious. Hong Kong
 billionaire Li Ka-shing owns 45 percent of the company's publicly traded shares,
 Meredith said, but ``no [mainland] Chinese shareholder to our knowledge owns
 more than one percent of the shares.''

 Charges that Hutchison Whampoa would act as a front for Chinese infiltration
 were likely raised by a U.S.-based competitor, Meredith said.