Many entrepreneurs are concerned about growing Chinese influence in commercial ports. A reason for evofenedex to lobby Brussels for a joint European approach to reduce the risks of unwanted Chinese interference.
In recent years, there has been increasing political attention to the influence of Chinese actors in seaports worldwide. Entrepreneurs are also following Chinese takeovers with suspicion. At the Day of Seafreight, an event organised by evofenedex in November 2024, 75 per cent of the entrepreneurs present revealed that they see Chinese involvement in European port infrastructure as (very) worrying.
Chinese influence
These concerns are not incomprehensible. To give some examples, the ports of Zeebrugge and Greek Pireaus are now fully Chinese-owned. In addition, China has majority shares in the ports of Valencia and Bilbao. The ports of Rotterdam and Antwerp are also partly owned by Chinese players.
In total, China has invested in more than 100 ports worldwide, of which it fully owns 13. Furthermore, there are other dependencies in the maritime industry. Almost half of all ocean-going vessels, including container ships and tankers, are built by Chinese yards. China's state-owned ZPMC has an 80 per cent global market share when it comes to gantry cranes in ports. And the use of customs scanners by Chinese companies in ports is also a concern.
Risks
Once in a while, disturbing stories emerge in the media about possible Chinese spying practices. A few years ago, for instance, US intelligence agencies warned about ZPMC cranes in ports. Equipment that China could use to spy or sabotage had been found in US cranes made by the Chinese company. China could remotely turn these cranes on and off for unwanted purposes and destabilise an entire port.
ZPMC cranes are also located in Rotterdam. Parliamentary questions were asked about this at the time, to which former minister Mark Harbers replied to take the concerns of the House of Representatives seriously. "It is essential that our ports can independently and safely perform their important maritime-logistics hub function for our economy and for the purpose of facilitating military transports," he stressed. The Chinese cranes prompted an investigation into whether the concerns should also apply to the Netherlands. Whether that investigation has now been completed or not is unknown, possibly also for security reasons.
Global network
In any case, there is no doubt about one thing: People's Republic of China is in the process of creating a global network of more or less Chinese ports, putting important strategic hubs in its hands. One of the latest Chinese acquisitions is the new Chancay port in Lima, Peru. President Xi Jinping was present in person in November 2024 to attend the official opening of the port. Located some 70 km from Lima, the new Chancay port will eventually have a capacity of 5 million TEUs. It will be able to berth container ships of 18,000 TEUs. This gives the port the potential to become one of the largest ports in Latin America. Chancay also has the deepest quays in the region; its draught is as much as 18 metres.
The Port of Santos in Brazil and the ports on either side of the Panama Canal are currently the largest ports in South and Central America respectively and have a maximum draft of 14 metres, which can accommodate container ships of up to 14,000 TEUs. The Brazilian government plans to connect the fertile hinterland by rail and roads to the port of Chancay on the Pacific coast, allowing metals and agrifood - which together account for 75 per cent of Latin American exports to China - to be transported almost two weeks faster.
Critical infrastructure
Chinese companies such as COSCO and China Merchants Group have poured billions of dollars into developing the Chancay port. They are doing so in cooperation with the Chinese government in numerous places around the world. In Africa, China is working on several port projects as part of the wider Belt and Road Initiative. In China itself, there is talk of a 'String of Pearls', a network of strategic military and maritime posts along the Indian Ocean. Examples of those posts include the ports of Gwadar (Pakistan), Kyauk Pyu (Myanmar), Hambantota (Sri Lanka), Ream (Cambodia) and Muara (Brunei). All ports in which China has a significant stake and is expanding its military presence.
There is hardly any doubt that China's contribution to infrastructure development in developing countries improves accessibility to local markets and lowers logistics costs for local and international businesses. However, worrisome is the issue of maintaining its own control over critical infrastructure.
The example of Chancay is apt. In March 2024, the Peruvian port authority discovered that due to an administrative error, COSCO Shipping Ports had acquired exclusive rights over the operation of the port. The port authority asked a court to overturn this, as it was not even in a position to grant those rights. In a response, COSCO threatened to quit the project. When President Dina Boluarte of Peru returned from her state visit to China in June 2024, the Peruvian government made a 180-degree turn and changed the rules of the game, allowing the port authority to grant exclusive operational rights to private companies. In other places around the world too - such as Hambantota - national governments have lost control because of shadowy deals between cash-strapped governments and Chinese state-owned companies.
Maritime lifeline
There has been speculation about expansion of Chinese military bases for years, since the port of African Djibouti officially became a base of the People's Liberation Army navy in 2017. No new bases have been added since then, despite ample speculation regarding especially the aforementioned Indian Ocean ports of Gwadar, Hambantota, Ream and Kyauk Pyu. However, China is unlikely to be able to match the extensive network of US naval bases. Hence, China uses a different strategy to cultivate commercial ports for strategic purposes.
Chinese companies' port holdings abroad are concentrated near key resource areas and export markets. Almost half of the ports managed by Chinese companies are located along the maritime highway - also known as SLOC - that connects China's coast with critical natural resources, key export markets and high-tech import markets. The SLOC runs from the Chinese coast, through the South China Sea and the Strait of Malacca, to the northern Indian Ocean, and then splits towards the Red Sea and Persian Gulf. Analysts describe this east-west SLOC as China's maritime lifeline. It would be designed to secure maritime activities. Protecting China's supply lines along this route is the navy's existential task.
Chinese transport law
Chinese companies like COSCO, China Merchants and CK Hutchison have a fundamentally different relationship to the state than Western companies. A concrete example of the relationship between state and company is a 2017 Chinese transport law. The 'National Defence Transportation Law of the People's Republic of China' defines the military and state power to determine when and how civilian resources are used for national defence. The law requires Chinese companies to provide logistical support to the People's Liberation Army at home and abroad. It also allows the army to order large and medium-sized transport companies to organise strategic support (think civilian ships and aircraft carrying personnel and supplies for the army). And to provide effective support for the rapid organisation of long-distance and large-scale defence transports. The law further provides that the army can, if necessary, station military representatives in relevant transport companies to coordinate interactions between companies and the army. And to manage equipment and supplies on site and even gather intelligence.
Alert
All this makes it clear that alertness is needed for Europe and European companies. evofenedex is currently lobbying with the European Shippers' Council (ESC) in Brussels for a 2025 European port strategy. Resilience is one of the important spearheads of that joint approach. Together with the ESC, we stress the importance of a common European position towards the influence of third countries in European ports. This is to reduce the risks of unwanted interference by third countries, including China, in ports.
Source: evofenedex