By James Pomfret and Clare Jim

HONG KONG (Reuters) - An expected delay in a key step in CK Hutchison's planned sale of its Panama ports to a U.S. group, a deal blasted by Chinese media, highlights growing concerns about Beijing's grip over Hong Kong and its exposure to global tensions, analysts say.

Definitive documentation for the port operations near the Panama Canal was due to be signed by April 2, according to the March 4 sale announcement, but sources have said the signing would be delayed and it was not a hard deadline. CK Hutchison did not immediately respond to a Reuters request for comment.

Wednesday was meant to mark the first part of a bigger deal, in which a BlackRock-led group would buy 43 ports in 23 countries.

The CK Hutchison transaction, which would bring the firm more than $19 billion, has remained under attack this week from pro-Beijing media depicting it as a betrayal of China and a potential violation of national security. Chinese authorities are also reviewing the deal on fair competition grounds.

"This issue bodes ill for Hong Kong, regardless of what comes next," wrote Steve Vickers, the CEO of a political and corporate risk consultancy Steve Vickers and Associates Limited in Hong Kong.

"Should CK Hutchison buckle to Chinese demands, Hong Kong'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."

Since the COVID pandemic and China's imposition of a national security law, Hong Kong has struggled economically, and is widely seen to have taken an authoritarian turn.

The U.S. State Department said in a report earlier this week there was an "overall trend ... of centralization under Beijing."

"Beijing permits Hong Kong to retain some differences from mainland China, including commercial and trade policy, but only so far as these policies offer unique contributions to Beijing’s interests," the report said.

Christopher Beddor, Deputy China Research Director at Gavekal Dragonomics, highlighted the broader implication of the Panama ports deal.

"It's hard to escape the conclusion that Beijing now clearly views CK Hutchison as a company with obligations to the Chinese national interest, and faces retaliation if it does not comply with those obligations," Beddor said.

"Markets will almost certainly do at least some read-across to the other Hong Kong conglomerates."

U.S. President Donald Trump had hailed the BlackRock transaction as a positive step at "reclaiming" the Panama Canal. It remains unclear how Washington will react should the deal fall through, though sources told Reuters the negotiations with BlackRock will continue.

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TELLING A GOOD HK STORY

The controversy risks casting a shadow over Hong Kong's mega events blitz aimed at putting the city on the global map and telling what officials often describe as "good Hong Kong stories".

Last week, the Hong Kong Rugby Sevens were held in a new 50,000 harbourside stadium, as one of "mega events" that also include Art Basel, performances by Coldplay, and a July football tournament featuring Liverpool, Arsenal, Tottenham Hotspur and AC Milan.

There are two realities about Hong Kong - the social aspect and the business aspect, said Alicia Garcia Herrero, chief Asia-Pacific economist at Natixis.

"(Socially) Hong Kong is still safe and has a boost because of where the world is heading," she said. In business, though, people feel "Hong Kong is now under a different regime," Herrero said.

(Additional reporting by Hong Kong Newsroom and Scott Murdoch in Sydney; Editing by Tommasz Janowski)