Silk Road Headlines_20th December, 2019

In an age of US-China great power rivalry, as manifested in a tech and trade war, any related development has strategic consequences. The commercial involvement in European ports by Chinese companies, for example, is not a novelty, but the way Europe perceives this is changing [European seaports and Chinese strategic influence: The relevance of the Maritime Silk Road for the Netherlands]. While the debate on how to deal with China’s growing port investments is ongoing, APM’s new Vado Gateway terminal in Italy opened on December 12 [APMT joint venture widens Cosco's med footprint]. The terminal is a joint venture of APM with Cosco Shipping Ports and Qingdao Ports International, both Chinese state-owned enterprises, and is expected to handle 900,000 TEU (twenty-foot equivalent container units) a year.

 

In Africa the Chinese model has often been based on resources-for-infrastructure, including maritime, which provides China with benefits that are different from its port investments in Europe [China’s Resources-for-Infrastructure Financing Mechanism is Evolving Into the “Sino-Africa Swap]. Boosting port operations in Africa brings not only commercial profitability for Chinese companies, but also greater influence for the Chinese government. China has shown a great diversity in its approach to foreign ports, which range from ports in war torn countries such as the port of Aden in Yemen [What does China Want From Yemen?], underdeveloped and cash-strapped ports as the one in Piraeus (prior to Cosco’s involvement), to leading hubs such as Rotterdam and Antwerp.

 

A recent example of the EU’s response to China’s Belt and Road initiative is the joint effort with Japan in pledging funding to connectivity projects across Eurasia [New responses to the Chinese BRI (2): the EU-Japan Partnership on Sustainable Connectivity]. This instance of cooperation contrasts with the internal situation in the EU, where a common approach by port authorities and relevant ministries to the maritime dimension of the BRI is lacking. China, via state-owned enterprise Cosco, has a controlling stake in an entire EU port in only one instance (i.e., in the port of Piraeus), yet this is still significant given that maritime shipping is crucial to the strategic autonomy of the EU. The geopolitical risks for Europe of the maritime dimension of China’s BRI may be difficult to identify just yet, but commercially it seems clear that European shipping and port operating companies’ competitive position within the EU is challenged vigorously by Chinese competitors. Meanwhile Japan is starting to show interest in European ports [Japan eyes Alexandropoulis port privatisation]. This further raises the question on what the future of the European maritime sector will look like. 

 

By Clingendael