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02 February, 2018
Why Is China Buying Up Europe’s Ports?
Photo: The Greek port of Piraeus on Jan. 31, 2015. (Angelos Tzortzinis/AFP/Getty Images)
State-owned port operators are the aggressive leading edge of Beijing’s massive Belt and Road project.
China’s trillion-dollar signature foreign-policy project, the Belt and Road Initiative, is often lampooned as just a fuzzy concept with little to show for it on the ground.
But in bustling ports from Singapore to the North Sea, state-owned Chinese firms are turning the idea into a reality with a series of aggressive acquisitions that are physically redrawing the map of global trade and political influence.
A pair of deep-pocketed Chinese behemoths, Cosco Shipping Ports and China Merchants Port Holdings, have gone on a buying binge of late, snapping up cargo terminals in the Indian Ocean, the Mediterranean Sea, and the Atlantic rim. Just last month, Cosco finalized the takeover of the terminal in Zeebrugge, Belgium’s second-biggest port, marking the Chinese firm’s first bridgehead in northwestern Europe.
That deal followed a raft of other acquisitions in Spain, Italy, and Greece in just the last couple of years. Chinese state firms, which once kept close to their home market, now control about one-tenth of all European port capacity.
The port deals are one of the clearest manifestations of Beijing’s ambitious plans to physically link China to Europe by sea, road, rail, and pipeline.
The port deals are one of the clearest manifestations of Beijing’s ambitious plans to physically link China to Europe by sea, road, rail, and pipeline.The ports underpin the maritime half of the Belt and Road Initiative, snaking from the South China Sea across the Indian Ocean, through the Suez Canal and into the soft underbelly of Europe.
“For somebody like Cosco, the deals make sense financially, and they can make their lords and masters in Beijing happy because it fits the Belt and Road narrative,” said Neil Davidson, a senior analyst for ports and terminals at Drewry, the maritime consultancy. “At bottom, there is a geopolitical underpinning to a lot of this.”
For China, still shaking off what it views as a century of humiliation by Western countries — which culminated with the forced opening of Chinese ports by European gunboats — snapping up the sinews of modern commerce is a satisfying way to return to what it sees as the normal state of affairs.
“The fundamental goal seems to be to decrease China’s dependence on foreign elements and increase China’s influence around the world,” said Frans-Paul van der Putten, a China expert at the Netherlands Institute of International Relations.
That rising influence is spooking many in Europe. With Chinese investment skyrocketing, European leaders are growing increasingly leery that Chinese President Xi Jinping is turning China’s economic heft into political pull. Since Cosco dropped $1 billion into buying and upgrading the once-sleepy Greek port of Piraeus, for example, Beijing has been able to count on Greek assistance to scupper European Union condemnations of China’s behavior on issues including human rights and the South China Sea.
Now that Chinese state-owned firms are marching across the Mediterranean — matched with parallel investment drives in Central and Eastern Europe — those worries aren’t going away.
“The scale of the Belt and Road investments in key infrastructure means China’s political influence in these countries will increase,” said Turloch Mooney, who covers global ports for IHS Markit. “That is assured.”