Navigating the Many Issues Surrounding China’s Ports Abroad |
China Power | Economy | East Asia
Navigating the Many Issues Surrounding China’s Ports Abroad
An array of economic, political, and security issues are associated with China’s overseas ports.
Powerful factors have propelled Chinese companies into ports abroad where they serve as builders, financiers, investors, terminal operators, and more. Equally powerful factors have motivated Beijing to support them.
Part 1 in this four-part series inter alia dove into the national and corporate motivations behind China’s port’s push, sketched a portrait of China’s overseas ports presence, and surveyed the raging storm about the economic, political, and military downsides of China’s heavy footprint in overseas ports.
The topic of Chinese ports remains front and center. China is escalating its detention of Panamanian-flagged ships following the termination of CK Hutchison’s operator role in two key Panama Canal Ports. An American congresswoman stated last month that the United States will help Peru take back Chancay Port from China, and India is moving to anchor its participation in Sri Lankan ports. This article, the second in the series, sinks into the economic, political, and security issues associated with China’s overseas ports, giving attention to potential upsides and downsides, with the former often glossed over in coverage of Chinese ports.
States embracing a Chinese presence in their ports forecast economic gains in three areas: the ports themselves, areas surrounding ports, and the zone beyond. They expect Chinese foreign direct investment (FDI), contracting, and good and services to boost port capacity, efficiency, and throughput and give birth to, or expand, ports businesses such as insurance and shipping repair. They also believe it will, a là the “Shekou Model,” result in the development of areas surrounding Chinese-involved ports. Such development can entail, among other things, special economic zones, transportation and power infrastructure such as rail lines, and commercial and industrial buildings. Powered by better ports and surrounding environs, policymakers and bureaucrats anticipate greater exports, foreign exchange, jobs, FDI inflows, and external connections.
The pessimists fret that China’s role will afford it control over shipping flows and invaluable port intelligence, which, in turn, would allow Beijing to steer ships, trade, and, relatedly, critical flows of natural resources. Even if China does not manipulate port traffic, ports imply greater inflows of Chinese goods and all the negatives associated with them, like higher trade deficits. Critics also charge that Chinese involvement has tied host countries in knots of excess debts, Chinese technical standards, and dependence on Chinese firms at the expense of local builders, suppliers, and service providers.
Countries rarely frame Chinese ports exclusively or primarily through the lens of political gains. Even so, some posit Chinese-facilitated port and port performance improvements in countries such as Egypt, Pakistan, and Peru will give them greater regional weight, increase their autonomy from Western states and financial institutions, and help them balance neighboring rivals. There is a domestic aspect, too. Better ports may empower policymakers to deliver........