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EU harbors fears about China’s maritime Silk Roads

Up to 13 European ports and harbors now have substantial investment from the world’s second-largest economy

By GORDON WATTSOCTOBER 10, 2018 7:01 PM (UTC+8)00

China has a passion of collecting ports across the world. Photo: iStock


At times, the European Union makes a tortoise look like a Toyota. Speed has never been a quality associated with the EU. After all with 27-member states, once the United Kingdom leaves next year, it takes time to reach a consensus.

Still, the rapid expansion of Chinese investment in the world’s largest integrated economic and political bloc has raised alarm bells in Brussels.

Last year, in his annual State of the Union address, the EU President Jean-Claude Juncker spelled out the dangers.

“Let me say once and for all – we are not naive free traders,” he said. “Europe must always defend its strategic interests. This is why today we are proposing a new EU framework for investment screening.

“If a foreign, state-owned company wants to purchase a European harbor [such as the Greek port of Piraeus], part of our energy infrastructure or a defense technology firm, this should only happen in transparency, with scrutiny and debate,” he added. “It is a political responsibility to know what is going on in our own backyard so that we can protect our collective security if needed.”

Nearly a year later, European leaders decided to call on both executive arms of the EU, the European Council and the European Parliament, to thrash out guidelines before next year’s elections.

The issue has become critical.

In the past decade, transport and infrastructure giants China Ocean Shipping Company, known as COSCO, and China Merchants Port Holdings have acquired stakes in 13 European ports, a study by the Organization for Economic Cooperation and Developmenthighlighted.

Chinese involvement centers on 10% of the continent’s shipping container capacity.

Graphic: NPR

“There’s a phrase, ‘pre-emptive obedience,’ that’s often used to discuss relations with the Chinese,” Theresa Fallon, a China analyst in Brussels, told National Public Radio, a nonprofit media station based in the United States.

“It means making decisions with the idea of not upsetting China. That’s already happening, and it’s worrying if you consider the stakes. If you think of China’s growth strategy [in maritime ports], they’ve invested all along the peripheries of Europe. So it’s like an anaconda strategy: Surround it and squeeze it,” she added.

Yet, this investment in key European transport hubs should come as no surprise.

In 2013, President Xi Jinping launched the Belt and Road Initiative in a fanfare of nationalistic pride.

Since then, it has become an extension of China’s global ambitions and the centerpiece of its economic foreign policy.

At the heart of the blueprint are ‘New Silk Road’ superhighways, connecting the world’s second-largest economy with 68 countries and 4.4 billion people across Asia, Africa, the Middle East and Europe in a labyrinth of multi-trillion-dollar infrastructure projects.

Major developments include direct rail and road links across Europe, Central and Southeast Asia, and the Middle East, as well as a controversial port-construction plan across vast swaths of the region.

Graphic: NPR

Ostensibly about trade, commercial B&R ports in Djibouti, Sri Lanka and Pakistanhave witnessed Chinese naval deployments. PLA Navy warships have also paid a friendly visit to Piraeus on the Mediterranean.

This is the jewel in COSCO’s crown after the state-owned behemoth clinched a US$1 billion deal for the strategically sensitive harbor in 2016.

“As the only multi-billion dollar port investment in the EU, the acquisition of a 35-year lease of Piraeus certainly represents China’s flagship project in this field,” academics Simone Tagliapietra and Shivali Panda wrote in a blog post for Bruegel, a think tank based in Brussels.

“Since its acquisition by COSCO, the port has experienced unprecedented growth due to new technology and infrastructure upgrades. In six years, port traffic grew by over 300%. Under new management and with millions of euros spent to expand port capacity, COSCO aims to have Piraeus rank as one of the busiest ports in Europe,” they added.

But with Chinese investment comes Chinese risk. Many in Europe question Beijing’s motives behind the Belt and Road program.

Greater transparency is needed, they argue, while the rising superpower’s militarization of the South and East China Seas is a cause for concern.

“Despite stating his support for increased EU-China cooperation, France’s President Emmanuel Macron expressed his hesitations by stating that the new ‘roads cannot be those of a new hegemony’ and ‘cannot be one-way,’” Tagliapietra and Panda said on the Bruegel website.

“Germany’s chancellor Angela Merkel has taken a similar stance, pushing for reciprocity and stating her worry that economic relations will be linked with political questions.”

The EU tortoise can be slow but it just might end up running rings around the Chinese dragon.


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