#47 Chinese Investment in EU-Seaports

In short:

• Chinese foreign direct investment in EU seaports has become a topic of heated debate. The main Chinese investors in EU seaports are Hutchison Ports, Cosco Ports and CMPort.
• This report analyses the impact on economic competitiveness and national security. Case studies of the ports of Piraeus, Antwerp-Bruges, Hamburg, Rotterdam and Gdansk show that Chinese investment only leads to increased competitiveness under certain conditions. Relevant factors are the ownership structure, the degree of integration and the type of investment.
• No clear tipping point for diminishing impact of Chinese investment on port competitiveness could be identified, except for the port of Piraeus.
• When it comes to national security interests and Chinese investments, the risks outweigh the benefits. An important risk factor is not just the Chinese investment itself, but also the related US scrutiny and US-China geopolitical tensions.
• However, this does not mean that Chinese investments in European seaports should in principle be avoided or reduced.
• Port policy should not only focus on Chinese FDI, but also other non-EU sources of investment as well as other forms of foreign involvement and dependencies. Concerning China, this especially includes the use of Chinese technology and software, and the EU’s trade deficit with China.

Ports are critical infrastructure. As the new EU Port Strategy writes, they are ‘vital gateways for trade, logistics, energy, and military mobility’. Ports are also at the midst of US-China geopolitical rivalry, as shown by the ongoing dispute over Chinese investments in ports in Panama. As such, Chinese foreign direct investment in EU seaports has become a topic of heated debate. How should the EU deal with foreign direct investment and related strategic dependencies? How does Chinese direct investment in EU seaports impact the port’s competitiveness and national security interests? Is there a tipping point where an increase in Chinese FDI no longer results in a significantly greater likelihood of attracting cargo flows?

This new report answers these questions in the following chapters:

• Chinese investors in EU ports: Hutchison Ports, Cosco Ports and CMPort
• Chinese investments and competitiveness of European seaports
• The impact of Chinese FDI in European seaports on national security interests
• Conclusions and policy recommendations

About the authors:

• Bart Kuipers is Senior Researcher in Port Economics at Erasmus UPT. He focuses on the following research areas: freight transport, international and national regional economic development related to freight transport, and freight transport policy and port policy. 
• Xiaoxue Martin is Research Fellow at the Clingendael China Centre. Her work focuses on the contemporary politics and international relations of China, in particular Taiwan affairs, and China’s relations with the United States and the European Union. She has researched topics including European dependence on China and Chinese influence in Europe’s logistic sectors. 
• Frans-Paul van der Putten is a researcher and consultant specialising in China’s role in global geopolitics. He is the founder of ChinaGeopolitics and a Senior Research Associate at the Clingendael Institute, where he previously coordinated the Clingendael China Centre. Trained as a historian at Leiden University, he wrote his PhD on political risk and foreign business in early 20th-century China. Frans-Paul has also served as Editor-in-Chief of Itinerario and has long worked on China–Europe relations and economic security. 
• Hilal Caferoğlu is a Junior Researcher at Erasmus UPT, where she works on monitoring and research projects in the port and maritime sector. Her work focuses on innovation, technological developments and analytical studies, addressing current and future challenges for ports and maritime systems. 
• Joep den Teuling contributed to this report as a research assistant at ChinaGeopolitics. 
• Shiqing Xiao is the managing editor of the Taiwan Radar substack. Shiqing is a Master of International Relations graduate from Leiden University. Now he is pursuing his Master of Political Science and International Relations at Geneva Graduate Institute. Previously he was a research assistant at ChinaGeopolitics. 
• Max Koonen is a research assistant at ChinaGeopolitics, and an editor and co-founder of The Balancing Act substack.

This study was conducted on behalf of the Dutch Ministry of Infrastructure and Water Management and the Ministry of Foreign Affairs, within the framework agreement for the Dutch China Knowledge Network (CKN). This is the third CKN report in a series on Chinese influence and European seaports. Read the previous reports here:

• #32 Port politics: Strategic autonomy and European ports | Clingendael CKN
• #20 Navigating an uncertain future | Clingendael CKN