China is Buying Up Ports and Influence Across Europe

The MV Maersk Mc-Kinney Moller, the world's biggest container ship, arrives at the harbour of Rotterdam August 16, 2013. The 55,000 tonne ship, named after the son of the founder of the oil and shipping group A.P. Moller-Maersk, has a length of 400 meters and cost $185 million. A.P. Moller-Maersk raised its annual profit forecast for the business on Friday, helped by tighter cost controls and lower fuel prices. Maersk shares jumped 6 percent to their highest in 1-1/2 years as investors welcomed a near-doubl

Europeans need to pay some attention to the costs of Chinese port investments as a part of their Maritime Silk Road.

Like the overland route, the Mediterranean region brings with it political diversity and some risk. The Mediterranian region includes EU and NATO, states with ancient democratic traditions and states that are barely functioning at all. Moreover, conflicts abound in and around Israel, and Cyprus and North Africa are rife with political uncertainties. Italy took two-and-a-half months to form a government after national elections in March and remains fragile. For China to be assured that its goods will make it to market, control of the entire supply line—including ports, railroads, and highways—is essential.

At the same time, the One Belt One Road perspective is much more than the flag following national trade. It is designed to expand Chinese strategic presence and enhance its influence across South Asia, Eurasia, the Middle East and into Europe. Economic links bring high-level visits, and port stops from the world's fastest growing merchant marine and significantly improved navy. At the end of China's Theodore Roosevelt-like naval grand tour of the EU in 2015, they Chinese navy held maneuvers with the Greek fleet. This practice that has continued and complements increased "blue-water" navy activities of the People's Liberation Army Navy in the eastern Mediterranean, off the coast of Africa, and even in the Baltic Sea.

A recent report by the think tank C4ADS points out that, under Chinese law, all commercial ports have an obligation to provide logistical support to that country's military should it be requested. The potential for such "dual-use" facilities in Sri Lanka and Pakistan, has alarmed, among others, Indian strategic analysts. These concerns have heightened since China began building its first overseas military base in Djibouti, ideally situated to respond to needs in the Indian Ocean and the Mediterranean.

The concerns of the EU are less military than economic and political and have so far produced little bloc response. The members hold differing views of, and vulnerability to, Chinese economic clout. In Greece, previous hostility to China’s purchase of Greek assets has disappeared, aided, ironically, by strict EU austerity policies. The leftist government of Alex Tsipras and the people of Greece (according to PEW) are now the most favorably inclined toward China of any country in Europe. In 2017 Greece vetoed an EU statement critical of China at the UN Council on Human Rights calling it "unconstructive" and "selective."

Only fifteen of the twenty-eight EU members have investment screening mechanisms to see if Chinese (or any other foreign) economic muscle threatens domestic competition or national security. No such mechanism exists at all at the EU level, though a process has begun to develop one. Nor is there an overall EU-level policy on ports, as the decision to accept or reject investment in or control over these critical facilities remains at the national level.

Still, the EU has been vocal about restrictive Chinese investment and trade policies in ways similar to those recently spelled out by the U.S. Trade Representative. And Brussels has not been shy about investigating suspected tax evasions or project bidding. But with the U.S.-EU Transatlantic Trade and Investment Partnership (TTIP) dead and the White House displaying volatile antipathy toward European allies, the capacity of the world's largest economic bloc to confront China is severely weakened. When China deals with Europe, there is no bloc of twenty-eight strong. There is Greece, whose GDP has fallen roughly twenty-five percent under EU-mandated austerity measures, or there is Italy which ranks twenty-seven out of twenty-eight EU economies in growth. In negotiations with a dynamic, economic behemoth with full pockets, such "partners" are severely disadvantaged.