Chinese Investments
in European
Maritime
Infrastructure
Policy Department for Structural and Cohesion Policies
Directorate-General for Internal Policies
PE 747.278 - September 2023
EN
STUDY
Requested by the TRAN Committee
Abstract
This study looks at Chinese investments in maritime
infrastructures through the lens of ‘de-risking’ for the first time. It
provides a comprehensive overview of Chinese investments in
the European maritime sector over the past two decades and
weighs the associated risks. The study borrows the framework
adopted by the National Risk Assessment of the Kingdom of the
Netherlands 2022 for its risk assessment and further develops it to
score the impact and likelihood of the investments across five
major threat areas: EU-level dependency risk, individual
dependency risk, coercion/influence risk, cyber/data risk and
hard security risk. The analysis illustrates that the risks remain
insufficiently understood by Member States, despite their high
likelihood and/or impact. This is particularly true for economic
coercion and cyber/data security risks.
RESEARCH FOR TRAN COMMITTEE
Chinese Investments
in European
Maritime
Infrastructure
This document was requested by the European Parliament's Committee on Transport and Tourism.
AUTHORS
Mercator Institute for Chinese Studies (MERICS): Francesca GHIRETTI, Jacob GUNTER, Gregor SEBASTIAN
The Vienna Institute for International Economic Studies (wiiw): Meryem GÖKTEN, Olga PINDYUK,
Zuzana ZAVARSKÁ
Institute of International Economic Relations: Plamen TONCHEV
Research administrator: Davide PERNICE
Project, publication and communication assistance: Mariana VÁCLAVOVÁ, Kinga OSTAŃSKA, Stephanie
DUPONT
Policy Department for Structural and Cohesion Policies, European Parliament
LINGUISTIC VERSIONS
Original: EN
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Manuscript completed in September 2023
© European Union, 2023
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Please use the following reference to cite this study:
Ghiretti, F, Gökten, M, Gunter, J, Pindyuk, O, Sebastian, G, Tonchev, P, Zavarská, Z, 2023, Research for
TRAN Committee – Chinese Investments in European Maritime Infrastructure, European Parliament,
Policy Department for Structural and Cohesion Policies, Brussels
Please use the following reference for in-text citations:
Ghiretti et al (2023), Research for TRAN Committee – Chinese Investments in European Maritime
Infrastructure, European Parliament, Policy Department for Structural and Cohesion Policies, Brussels
DISCLAIMER
The opinions expressed in this document are the sole responsibility of the authors and do not
necessarily represent the official position of the European Parliament.
Reproduction and translation for non-commercial purposes are authorized, provided the source is
acknowledged and the publisher is given prior notice and sent a copy.
© Cover image used under the licence from Adobe Stock
Chinese Investments in European Maritime Infrastructures
3
CONTENTS
LIST OF ABBREVIATIONS 4
LIST OF FIGURES 7
LIST OF TABLES 7
EXECUTIVE SUMMARY 8
1. INTRODUCTION 10
1.1. Scope of the study 10
1.2. Overview of China as a maritime power 11
1.3. Specificities of Chinese direct investments 12
1.4. Chinese investments in the maritime sector in Europe 12
2. CASE STUDIES AND RISK ASSESSMENTS 16
2.1. EU-level dependency risk assessment 17
2.2. Piraues, Greece 21
2.3. Hamburg, Germany 28
2.4. Kumport, Turkey 34
2.5. Impact on EU of Chinese investments in European Neighbourhood 38
2.6. Comparison of key regulations between the EU and US related to FDI
screening and maritime cabotage law 39
3. CONCLUSION AND POLICY RECOMMENDATIONS 41
REFERENCES 44
ANNEX 47
IPOL | Policy Department for Structural and Cohesion Policies
4
LIST OF ABBREVIATIONS
German Ministry of the Interior
German Federal Ministry of Economic Affairs and Climate Action
Board of directors
Belt and Road Initiative
German Federal Office for Information Security
Central Aircraft Manufacturing Company
Central Bank of the Republic of Turkey
China Communications Construction Company
Chinese Communist Party
China Investment Corporation
China International Marine Containers
China Merchants Group
China Merchants Port
China Merchants Port Holdings
China Ocean Shipping Company
COSCO Pacific Limited
COSCO Shipping Ports Limited
China State Shipbuilding Corporation
Container Terminal Tollerort
Changzhou Xinhuachang International Containers
Environmental impact assessment
The European Union Agency for Cybersecurity
Foreign direct investment
Foundation for Economic and Industrial Research
Chinese Investments in European Maritime Infrastructures
5
Hamburger Hafen und Logistik
Hellenic Port Community System
Hellenic Republic Asset Development Fund
Industrial and Commercial Bank of China
Information and communication technologies
Mergers and acquisitions
Middle East and North Africa
Member of the European Parliament
Mediterranean Shipping Company
The North Atlantic Treaty Organization
Network & Information Systems
Orient Overseas Container Line
Organization for Security and Co-operation in Europe
Open-Source Intelligence
Piraeus Consolidation & Distribution Centre
Piraeus Container Terminal
Piraeus-Europe-Asia Rail Logistics
The People's Liberation Army Navy
Piraeus Port Authority
SASAC
State-owned Assets Supervision and Administration Commission of the State
Council
Strategic Environmental Impact Assessment
Shanghai International Port Group
State-owned enterprise
Trans-European Network for Transport
IPOL | Policy Department for Structural and Cohesion Policies
6
Twenty-foot equivalent unit
Terminal operating system
United Nations
Shanghai Zhenhua Heavy Industries Company Limited
Chinese Investments in European Maritime Infrastructures
7
LIST OF FIGURES
Figure 1: China’s acquisitions and announced greenfield investment projects in the maritime
sector infrastructure of the EU and its Neighbourhood 13
Figure 2: Number of jobs created, and capital pledged in the announced greenfield
investment projects in the maritime sector infrastructure of the EU and its
Neighbourhood by China, 2004-2021* 14
Figure 3: CMP and COSCO investments in European ports 15
Figure 4: COSCO’s protected home market advantage 18
Figure 5: COSCO’s vertically integrated value chain 19
Figure 6: COSCO Shipping Lines - NET Feeder Route 36
Figure 7: Map of Piraeus Port 50
LIST OF TABLES
Table 1: Value of acquisitions in the maritime infrastructure sector of EU and its
Neighbourhood by Chinese companies 47
Table 2: Pledged capital in announced greenfield investment projects in the maritime
sector infrastructure of the EU and its Neighbourhood; EUR m 48
Table 3: Mandatory Investments in the Port of Piraeus 49
Table 4: PPA/OLP Board of Directors 49
Table 5: Gross throughput volume of Kumport Terminal 50
IPOL | Policy Department for Structural and Cohesion Policies
8
EXECUTIVE SUMMARY
• This study identifies 24 Chinese acquisition deals and 13 announced greenfield investment
projects in European maritime infrastructure from 2004 to 2021. Acquisitions accounted for the
bulk of the capital invested – in total, according to our calculations, their value exceeded EUR
9.1bn, while the value of the capital pledged in the greenfield projects was about EUR 1.1bn.
• Investment activity by Chinese companies in the maritime sector subsided noticeably in 2020-
2021, probably reflecting the effects of the COVID-19 pandemic and ‘zero-COVID’ policies, and
also the introduction of stricter FDI screening mechanisms in the region.
• China Ocean Shipping Company (COSCO) and China Merchants have been the leading
investors. Shanghai Zhenhua Heavy Industries Company Limited (ZPMC) is the main supplier
of ship-to-shore cranes for European ports. Chinese state-owned enterprises (SOEs) involved in
European maritime infrastructure benefit from a protected home market advantage and a
vertically integrated value chain under the ownership of the State-owned Assets Supervision
and Administration Commission (SASAC) – these facilitate anti-competitive market share
expansion in Europe and risks concerning common market dependency on Chinese providers.
• The analysis of the three case studies - two in EU Member States and one in a EU candidate
country - of the Port of Piraeus (Greece), the Port of Hamburg (Germany) and the Kumport
Terminal (Turkey) show that Chinese investments can bring benefits such as upgrades and
expansions of port capacity (i.e. at Piraeus and Kumport). However, of the cases analysed, only
at the Port of Piraeus has this led to a substantial increase in transit and shipping. The Kumport
Terminal has had a disappointing performance and is operating below its capacity.
• The risk assessment analyses five types of risk: EU-level dependency risk; individual
dependency risk of each case; coercion and/or influence risk; cyber/data risk; and hard security
risk. The analysis highlights that economic coercion and cyber/data security risks are higher
and thus require more attention by the EU and Member States both in terms of preparedness
and awareness.
• Awareness of and capacity to deal with cyber/data risk is identified as the most urgent issue
where the EU and its Member States have poor capabilities. Cyber/data risks will quickly
become more widespread as the digital transition, application of 5G, use of sensors, etc.
develop in the shipping and port operation industries.
• The study shows that investments in one European maritime infrastructure increase the risks
for the whole of the EU. The risk increase appears to be proportional to the investment: the
larger the shares owned by a Chinese enterprise of a European maritime infrastructure, the
higher the risks and their consequences.
• The study notes that risks arise from the deliberate strategy by China to leverage its
investments in European maritime infrastructure to its own advantage, and as a result of
conflict scenarios (i.e. the Taiwan conflict, or disputes between the EU and/or Member States
and China).
• Finally, the risk scenarios envisaged in this study indicate a complex situation that is neither
‘business as usual’ nor ‘apocalyptic sensationalism’. Some risks are likely to require monitoring
and stronger enforcement of current rules, others will need moderate change or co-ordination
between the European Institutions and Member States, and yet others will demand more
complex solutions.
Chinese Investments in European Maritime Infrastructures
9
• Data and analysis of Chinese presence in cyber/data management in ports is poor and so is the
analysis of related risks. Further research to collect data on the risks of Chinese companies’
involvement in cyber and data security in critical infrastructures would provide a strong basis
to inform Member States and develop related policies.
• The study outcomes suggest that Member States carry out a risk assessment of China’s
involvement in their maritime infrastructures that includes the impact on labour and the
environment, as well as on dependencies. An assessment of bottlenecks in the shipping of
goods from China to Europe that considers transshipment is missing. Following such
assessment, redundancies and contingency plans should be created to prepare for a conflict
with China. An early warning system should be established for the risks that require monitoring
and according to the methodology proposed in this study.
• A proposal for a European maritime cabotage law needs to be developed. An EU solution
already exists for air and land, but not for the maritime sector. As such, EU solutions for air and
land provide the basis to adopt a pan-EU maritime cabotage law that could apply to non-EU
shippers.
• Findings suggest a move toward the Europeanisation of screening of inbound investments.
The European Parliament should use the opportunity provided by the review of the existing EU
regulation on screening FDI
1
to propose a strengthening of the role of the EU in not only
screening but also blocking Chinese investments in critical infrastructures. Maritime critical
infrastructure is an area where the decision of one Member State impacts all Member States,
and it could be a pilot case to advance the Europeanisation of FDI screening in critical
infrastructures. This could be limited to majority shareholding of Chinese enterprises, leaving
decisions on minority shareholdings in the hands of Member States.
• To mitigate cyber and data security risks, guidelines on dealing with high-risk actors, such as
data-sharing best practices, should be published, then a regular (six-monthly and then annual)
review of progress with annexed transparency and reporting requirements should be ensured.
The initial report should map existing European ports that use Chinese software and/or data
management platforms and the data being collected and transmitted via these.
1
Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of
foreign direct investments into the Union.
IPOL | Policy Department for Structural and Cohesion Policies
10
1. INTRODUCTION
1.1. Scope of the study
Economic relations between the EU and the People’s Republic of China (hereafter China) have been
dynamically developing over the past two decades. Following China’s remarkable economic ascent,
the country has become the EU’s third-largest export destination and its largest source of imports.
Beyond trade, China has emerged as a major source of global FDI flows, including in the EU. Although
total Chinese FDI stocks in Europe remain small compared to other investment partners
, they have
relevance in several sectors with strategic importance. As economic security risks (e.g. critical
dependencies) stemming from foreign ownership become more apparent, the EU has committed to
de-risking to a more resilient and autonomous economic structure, particularly vis-à-vis China, which it
considers ‘a partner, a competitor and a systemic rival’.
The EU framework for FDI Screening, introduced in 2020, aimed to create a co-operation mechanism
for information sharing on FDI across EU Member States, and between Member States and the
Commission. The Regulation is up for review in 2023. Furthermore, in 2022 the EU approved new
rules
for protecting the EU’s essential infrastructure, according to which Member States should adopt
national resilience strategies and cross-border communication should take place through designated
points of contact.
One critical area that is addressed by the Regulation and in which Chinese firms have been
accumulating growing stakes – not least through the flagship Belt and Road Initiative (BRI) – is transport
infrastructure. Maritime ports form an indispensable component of this, serving as vital gateways for
international trade and global connectivity. In this regard, the ownership structure of EU’s ports
deserves special attention, especially as, over the past decade, Chinese state-owned firms have
acquired stakes in 15 European ports – including in Belgium, France, Greece, Italy, Malta,
the Netherlands and Spain in the EU, as well as in EU Neighbourhood states such as Turkey.
The security risks associated with Chinese investments and ownership of European ports have been
debated at national and international levels and have spurred increased scrutiny and awareness.
However, an analysis of critical infrastructures, including transport infrastructures, through the lens of
de-risking is yet to be undertaken.
2
Therefore, the main scope of this study is to carry out a thorough
risk assessment that focuses on risk scenarios associated with Chinese involvement in the EU’s maritime
infrastructure via FDI. Although the scope of this study’s risk assessment is narrow, the assessment can
then be replicated to other infrastructures and other sectors to obtain a more comprehensive picture
of the risks posed by Chinese investments in the EU.
Against this backdrop, this study aims to provide policy recommendations to guide EU decision-
making, with particular attention to the competences of the European Parliament. To this end, the
study is divided into three sections. Section 1 is an introductory chapter, providing a background
regarding the Chinese position as a maritime power in investments and shipping. In this section,
detailed data on Chinese investments in the maritime sector in Europe
are identified, collated and
descriptively analysed to understand the magnitude and the trends in these FDI flows. Section 2
provides a case study-based risk assessment of Chinese investments in the EU maritime infrastructure
to provide the necessary depth to our analysis. The study assesses the risks using a framework designed
by the National Risk Assessment of the Kingdom of the Netherlands 2022 and adapting it to the
requirements of this study by focusing on five key risk areas. The framework is applied generally to the
EU, as well as to three case studies: the Port of Piraeus in Greece, the Port of Hamburg in Germany, and
2
In this study, de-risking is used with the meaning of managing and decreasing risk.
Chinese Investments in European Maritime Infrastructures
11
the Kumport Terminal in Turkey. This section also considers the implications for the broader European
context beyond the EU and its Neighbourhood states. Finally, Section 3 summarises the study's main
conclusions and presents evidence-based and actionable policy recommendations to mitigate and
manage the identified security risks.
1.2. Overview of China as a maritime power
At present, 90% of global goods traverse through shipping routes. According to the World Trade
Organization (WTO), in 2020 shipping accounted for 53% of the total value of China’s trade. Within its
borders, China boasts the highest concentration of shipping ports within a single country, with seven
of these ports among the world's busiest.
Outside China’s borders, investments in ports have constituted a significant facet of President
Xi Jinping's ambitious Belt and Road Initiative.
3
China’s global maritime investments have predominantly been carried out by the state-owned
enterprises China Ocean Shipping Company (COSCO) and China Merchants Group (CMG), and by
CK Hutchison Holdings, a private enterprise based in Hong Kong. However, other entities have also
played their part in bolstering the global presence of Chinese firms within port operations. Prominent
among these are the
Shanghai International Port Group (SIPG) and port authorities such as
Qingdao Port. China Communications Construction Company (CCCC) has occasionally put forward
investment proposals concerning critical maritime infrastructure, although its activities predominantly
focus on investments and construction in other sectors. Among the entities listed, COSCO notably
holds the distinction of being a pivotal container shipping company, and is thus uniquely positioned,
with the capacity to re-route containers to alternative ports directly.
Beyond direct investments in port facilities, China has emerged as the predominant global
manufacturer of essential equipment. Impressively,
China's production encompasses 96% of the
worldwide share of shipping containers and 80% of ship-to-shore cranes, and it claimed 48% of the
world's shipbuilding orders in 2022.
Chinese firms also deliver indispensable services critical to the
modern functioning of ports. For instance, Shanghai Zhenhua Heavy Industries Company Limited
(ZPMC) is the leading supplier of ship-to-shore cranes and it
has offices in some of the European cities
that host investments by COSCO: Rotterdam (the Netherlands), Valencia (Spain), Hamburg (Germany)
and Savona (Italy), but is active in most European ports, including in
Belgium, Greece and France.
In early 2023 The Wall Street Journal published an article arguing that the sophisticated technology of
ZPMC’s cranes allowed the equipment to collect data on the origin and destination of containers. This
was not the first occasion on which concerns had been raised about Chinese companies’ data
management systems for ports within their investment purview. The lack of clarity over the capabilities
of technologies present in ship-to-shore cranes highlights an important but overlooked aspect related
to the presence of Chinese companies in the European maritime transport sector, that of cyber- and
data security. The key risks centre on the potential access that Chinese companies might gain to
sensitive data, both civilian and military. An example of such exposure is the signing of a
co-o
peration
agreement between Portbase, a Dutch company that improves communication and data exchanges
between ports and inland infrastructures, and Logink, a Chinese company that operates in the same
sector, in 2019. China’s Data Security Law and the National Intelligence Law, furthermore, require data
to be shared with the Chinese government if required.
3
Not all investments amount to full ownership.
IPOL | Policy Department for Structural and Cohesion Policies
12
1.3. Specificities of Chinese direct investments
Attention towards Chinese investments in critical infrastructures and the associated risks has been
increasing since the mid-2010s. Several factors contribute to Chinese investments being seen to
challenge the EU’s openness, economic resilience and security, more so than for investments
originating from other major sources. The three primary reasons are:
1. State ownership of investing companies. The fact that many Chinese enterprises investing
abroad are state-owned raises questions about their autonomy from the government and their
integration within the broader system. While acknowledging the potential commercial
motivations behind these investments, it is essential to recognise that Chinese SOEs might also
pursue objectives beyond mere profitability, unlike their European equivalents with fiduciary
responsibilities to shareholders. These objectives are often spelled out in China’s strategic
documents; they can range from expanding China's influence within a vital sector for global
trade to acquiring strategic assets that bolster China's geopolitical standing. This is especially
true since Xi Jinping came to power in 2013, as he has reversed the direction of SOE reform and
has instead called for 'better, stronger, bigger' SOEs to advance Chinese interests
. The nature
of SOEs urges a comprehensive analysis encompassing both commercial and strategic
considerations.
2. Magnitude and expansion of Chinese investments. The remarkable scale and rapid
expansion of Chinese investments within the sector have been exemplified by prominent
Chinese enterprises spearheading numerous acquisitions abroad throughout the 2000s, with
a particular surge in activity during the 2010s. This surge has raised concerns that Chinese SOEs,
and to some extent China as a whole, are progressively establishing dominance within the
sector, leaving limited room for competitors. The apprehension centres on the emergence of
issues such as unfair practices, market distortions, unfair competition and the absence of a level
playing-field. Chinese SOEs possess inherent advantages rooted in their national ecosystem,
which they leverage to outperform their counterparts (see Section 2.1).
3. Political and security implications of Chinese investments. The notion of China as a
systemic rival reinforces the urgent need to consider the security implications associated with
investments from a country that has exhibited deficiencies in the rule of law and in
fundamental principles such as transparency and labour rights. Moreover, as geopolitical
tensions between the United States and China escalate, China has embraced strategies
including economic coercion
4
and other forms of influence. These strategies raise pertinent
questions concerning the political and security ramifications of Chinese companies' presence
within critical infrastructures that form the bedrock of our societies' functioning.
1.4. Chinese investments in the maritime sector in Europe
This section analyses the data on Chinese direct investments in the EU’s maritime transport
infrastructure. The data coverage of China’s investment activity abroad is somewhat patchy. Hence,
data from multiple sources are consolidated to present the most comprehensive picture possible of
the Chinese investment presence in the EU’s maritime sector. We convert USD-denominated values
into EUR-denominated ones using average annual and monthly USD/EUR exchange rates reported by
the European Central Bank.
4
Using economic means and lever to achieve political goals. China's economic coercion (europa.eu)
Chinese Investments in European Maritime Infrastructures
13
Figure 1 shows the investment activity of Chinese companies in the maritime transport sector of the
EU and its Neighbourhood
5
based on the data collected. During 2004-2021, a total of 24 acquisition
deals, and 13 announced greenfield investment projects can be identified in the sector, with China
Ocean Shipping Company (COSCO) and China Merchants being the leading investors. Acquisitions
accounted for the bulk of the capital invested – during 2004-2021 their total value exceeded
EUR 9.1bn,
6
while the value of the capital pledged in the announced greenfield projects stood at about
EUR 1.1bn. This is in line with the general strategy of Chinese investors till recently to prefer cross-
border M&A to access existing strategic assets as well as technologies, and quickly expand their market
share. In 2020-2021 investment activity by Chinese companies in the sector sharply subsided, probably
reflecting the effects of the COVID-19 pandemic and 'zero-COVID' policies on the Chinese economy,
as
well as the introduction of stricter FDI screening mechanisms in the region. More detailed information
on the investment projects can be found in
Table 1 and Table 2 in the Annex.
Figure 1: China’s acquisitions and announced greenfield investment projects in the
maritime sector infrastructure of the EU and its Neighbourhood
Number of deals Value of investment, EUR m
Sources: fDi Markets; China Global Investment Tracker; ECFR China-EU Power Audit Key Deals 2005-2017; China Overseas
Port Project Dataset 1979-2019; https://www.truenumbers.it/cina-porti-europa/; authors’ calculations.
* In 2010 and 2016 there were deals with unknown value: in 2010 Shanghai International Port Group acquired 25% of
Zeebrugge Port; in 2016 ICBC acquired a stake in Antwerp Port.
According to fDi Markets data
7
, China’s greenfield investment projects in the sector generated around
3,200 jobs during the entire period, most of them in Greece in the projects related to Piraeus port in
2013 (700 jobs), 2016 (1,255 jobs), and 2019 (507 jobs) – see Figure 2. Spain comes second in terms of
jobs created and capital pledged, but the numbers do not even come close to those recorded in Greece.
5
The EU Neighbourhood is defined here as Western Balkan countries, Georgia, Moldova, Turkey and Ukraine.
6
There is no available information on the value of two acquisition deals.
7
fDi Markets, a Financial Times dataset on cross-border greenfield investments that covers all countries and sectors worldwide. It contains
information on various characteristics of the announced greenfield investment projects, such as sector of the mother company and an
affiliate that is being created, value of investment projects and estimate of the jobs being created.
0
1
2
3
4
5
6
7
8
9
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Greenfield investment Acquisitions
0
200
400
600
800
1000
1200
1400
1600
1800
2004
2005
2006
2007
2008
2009
2010*
2012
2013
2014
2015
2016*
2017
2018
2019
2020
2021
Greenfield investment Acquisitions
2008 - 3935
IPOL | Policy Department for Structural and Cohesion Policies
14
Figure 2: Number of jobs created, and capital pledged in the announced greenfield
investment projects in the maritime sector infrastructure of the EU and its
Neighbourhood by China, 2004-2021*
Number of jobs Value of investment, EUR m
Source: fDi Markets, authors’ calculations.
* The Hamburg port investment was originally planned to be EUR 100m, but has since been reduced in scale, with a decrease
in the shareholding to 24.99%. The revised investment value is not yet known and therefore not accounted for in the graph
above.
Chinese SOEs have established a presence in 15 distinct EU ports in countries including Greece, Malta,
Italy, Spain, France, Belgium, the Netherlands and Germany. China controls about 10% of European
throughput (see
Figure 3)
8
. However, not all of these investments entail a majority stake or full
ownership. In many instances where a majority shareholding or ownership is achieved, the investment
is concentrated within a specific terminal within the port, rather than encompassing the entire port
complex. A notable exception that diverges from this pattern is the Port of Piraeus in Greece, one of the
case studies we analyse, where COSCO holds majority shares in the port and maintains complete
ownership of the container terminal.
The predominant period for these investments in European ports dates from 2013 to 2020. Because
China’s economy has been slowing down, China's overseas investments in large infrastructural projects
have been scaled back in some destinations. Investments have been further negatively impacted as a
growing array of EU countries have begun instituting policies to scrutinise and potentially impede FDI.
This trend has not spared investments in ports, although sporadic but pertinent investments continue
to arise. One such recent instance involves
COSCO's acquisition of stakes in the Container Terminal
Tollerort (CTT) within the Port of Hamburg, Germany, a transaction finalised in 2023.
Many of the European ports in which Chinese enterprise have a stake are part of the EU’s core trans-
European transport network policy (TEN-T). The scope of the TEN-T is to develop
“coherent, efficient,
multimodal, and high-quality transport infrastructure across the EU” by connecting different means of
transportations in one network. The aggregated Chinese presence in these ports in nodes of the core
TEN-T carries important implications for the resilience of the network that range from minor disruptions
in one node (i.e., in a small terminal such as the Tollerort terminal in the port of Hamburg) to disruptions
to the whole core network (i.e., if all Chinese investments in EU ports are leveraged and/or suspended
at the same time). Section 2 of the study will further elaborate on these cases and on intermediary
steps.
8
Other investments in Europe by Chinese companies that are not SOEs include two by Hutchison Ports Holdings (HPH): one in Poland, in
Wolny Obszar Gospodarczy (WOG), a terminal at the Port of Gdynia; and one in Sweden, in a container terminal within Stockholm Free
Port.
0
50
100
150
200
250
300
2350
2400
2450
2500
0
25
50
75
100
125
825
850
875
Chinese Investments in European Maritime Infrastructures
15
Even though TEN-T connects multiple European ports, and other transport infrastructures in the single
market, the EU maritime cabotage regulation o
nly “ensure(s) that maritime transport services within a
Member State can be offered by companies of other Member States”. Transport services are still
registered and regulated at national level not at EU level, meaning that different Member States have
different levels of openness and restrictiveness vis à vis non-European vessels. That is not the case for,
for example,
air tran
sports. Furthermore, due to the lack of a common market maritime cabotage, non-
EU ships can move from one Member State to another to avoid the cabotage law of a specific Member
States and can still interact with the common market at each port.
Figure 3: CMP and COSCO investments in European ports
IPOL | Policy Department for Structural and Cohesion Policies
16
2. CASE STUDIES AND RISK ASSESSMENTS
A general and case study-based risk assessment is conducted in this study, in order to provide an
in- depth evaluation of the Chinese investment presence in European maritime transport
infrastructure. The risk assessment framework applied adapts the methodology from the
National Risk
Assessment of the Kingdom of the Netherlands 2022 compiled by the National Network of Safety and
Security Analysts, which follows the main methodology usually adopted in risk analysis by other
countries and in the private sector. The purpose is to evaluate various risks across two primary
dimensions – likelihood and impact – across different potential scenarios.
Risks are categorised into five main groupings, which are most relevant to critical transportation
infrastructure:
1. EU-level dependency risk (additional dependency risks to total single market dependency
levels) – How dependent is the single market on the Chinese investment in the port infrastructure?
2. Individual dependency risk (dependency risks for an individual investment) – How dependent
is the host country on the Chinese investment in the given port infrastructure, including at the
‘ecosystem’ level?
3. Coercion and/or influence risk – Does this investment meaningfully raise the risk of Beijing’s
coercion/influence over the country’s and EU politics, actively or passively?
4. Cyber/data risk – Does Chinese investment/participation in this infrastructure/project create new
cyber threats to critical infrastructure and/or raise data security/privacy risks?
5. Hard security risk – Does the investment create traditional national security risks, mainly related to
use by China’s military or to its ability to inhibit or undermine European security?
These five risk groups are used as lenses to examine the risk to critical transportation infrastructure
across the EU and countries in the European Neighbourhood. To enhance the comprehensive
assessment of risks, three case studies delve into specific risk scenarios that might emerge as a result
of Chinese investments in, or utilisation of, critical maritime infrastructures across Europe. Each scenario
is subjected to a thorough analysis, evaluating its likelihood of occurrence and potential impact. The
findings of this assessment are subsequently organised into a table, plotting the scenarios based on
their likelihood and impact levels. This visual representation aids stakeholders in promptly gauging
which risks necessitate immediate attention and action and, in contrast, which require lighter
monitoring and contingency planning.
The following three case studies are examined through the lenses of the risk groupings:
• The Port of Piraeus, Greece
• The Port of Hamburg, Germany
• Kumport Terminal, Turkey
The selection of these cases illustrates distinct scenarios involving Chinese SOEs and their investments
within European ports. These cases encompass a spectrum, ranging from an instance where a Chinese
SOE holds full ownership of container terminals plus a majority share of the port authority in an EU port
(Port of Piraeus, Greece) to a case with a minority shareholding in a single terminal within an EU port
(Port of Hamburg, Germany). The selection includes a case study from an EU candidate country
(Kumport Terminal, Turkey).
Chinese Investments in European Maritime Infrastructures
17
2.1. EU-level dependency risk assessment
Background
Individual investments in European maritime infrastructure generate varying levels of dependency on
a single-site or whole-of-country basis. Nevertheless, each investment also adds to a net dependency
risk at the EU level. This section looks into the risks and opportunities that the collective footprint of
Chinese investment in European ports and shipping operations has on the common market.
Importantly, this big-picture assessment provides context for the subsequent case studies that look at
individual cases in more detail.
Benefits drawn from China-sourced investment in European maritime infrastructure
For acquisitions of existing infrastructure, the shareholders in ports receiving investment from Chinese
firms are the most immediate beneficiaries, when that investment surge is paid out through dividends.
Beyond that, the port operators sometimes use the raised capital to pay off liabilities or reinvest it into
the port to upgrade or expand operations.
However, the longer-term benefits, including through M&A and greenfield investment, can be
considerable
9
– but only to the degree that the acquisition meaningfully expands trade flows and/or
boosts the efficiency of port operations. As such, if the acquisition expands the capacity of total import
and export potential, which is then utilised, the benefits at the EU level are significant. In other words,
if investment and increases in shipping services – which boost ‘supply’ – are met with new demand as
a result of, for example, lower prices or easier/better access to overseas markets, the benefit is notable.
However, if this only manages to redirect existing demand to use one port over another, the benefits
are negligible if not net-zero, and only materialize at the local level.
For example, suppose that the investment in the Port of Hamburg lowers prices and improves access
to foreign markets to the extent that it leads companies in the hinterland to increase production for
export. In that case, the benefits are considerable: more production means higher employment,
increased demand for rail, barge and truck services to get products to the port, and more employment
at and a better return on investment (ROI) from the port itself. But suppose that the investment and
increased traffic in Hamburg only lead to already existing trade flows redirecting to Hamburg, and away
from Rotterdam and Gdansk. In that case, the net benefit is marginal, even though it is good for the
logistics chain leading to the Port of Hamburg, albeit at the expense of Rotterdam and Gdansk.
Downside of China-sourced investment in European maritime infrastructure
The primary downside to the expansion of the market share of Chinese SOEs such as COSCO and CMG
in European shipping markets is that higher market share also means higher dependency risks. Many
in Europe learned this lesson the hard way after Russia invaded Ukraine and they found themselves
dependent not only on oil and gas infrastructure controlled by Russian firms, such as Nord Stream, but
also on the oil and gas that flowed through it. Russian market share in those countries’ energy mix
quickly translated into dependency on Russia that could be weaponised at the worst possible moment.
Even in circumstances falling short of a Russia-like scenario, dependency concerns are at the core of de-
risking efforts – many risks exist only because of the level of reliance on China as provider of certain
goods. The political/geopolitical connection, therefore, has already been made for China-dominated
products such as refined critical raw minerals, solar panels and legacy chips. However, services such as
port operation and shipping services, which underlie the global value chains that Europe heavily relies
on, are often overlooked.
9
Such as investments to expand throughput capacity, which COSCO made in Piraeus.
IPOL | Policy Department for Structural and Cohesion Policies
18
Although there is considerable risk that COSCO will be able to, over time, take market share from
European shippers owing to the unfair advantages (outlined below) that it enjoys, European shippers
do enjoy a substantial head start. Four of the five largest container shippers (measured by throughput
)
are European; the other is COSCO. That said, COSCO’s global market share in container shipping has
grown steadily, from
4.5% in 2013 to 10.8% in 2023.
COSCO has achieved rapid and sustained growth, and its expansion is fuelled heavily by advantages it
enjoys in its home market, which can be projected outward. However, at its core, COSCO should be
understood to be profoundly unlike its European competitors. Unlike the publicly listed European firms
it strives to outcompete, COSCO is legally bound to advance the strategic goals of its country’s
government and it rejects the fiduciary responsibilities that others are bound by to their shareholders.
Instead, COSCO can, to the degree that Beijing wants it to, cut into its margins in order to boost its
market share.
COSCO benefits from extensive protectionism at home that enhances its EU market share growth
In its home market, COSCO benefits from extensive protection through
extremely restrictive maritime
cabotage law (see Figure 4). Foreign shippers can engage in standard international shipping at Chinese
ports. However, they are banned from international relay
10
(except for one marginal pilot programme
limited to a few ports) and domestic/hinterland shipping. To transship or carry out inland shipping,
China requires that vessels be Chinese-flagged and owned and operated by a Chinese company. As
such, Hapag-Lloyd or MSC would be able to bring goods to and from the Port of Shanghai, but even if
they invested in a local subsidiary and had Chinese-flagged vessels, they could not transship goods
from Qingdao through Shanghai or bring goods from Wuhan down the Yangtze to be shipped from
Shanghai to foreign markets.
Figure 4: COSCO’s protected home market advantage
Source: MERICS
10
Relay is a container transfer between two ships controlled by the same carrier. In case of international relay, coastal relay of international
cargo is done by a foreign carrier.
Chinese Investments in European Maritime Infrastructures
19
Meanwhile, COSCO can and does engage in all types of shipping in Europe, directly or through
subsidiaries. Its investments in the Port of Piraeus are explicitly for transshipping purposes, as is the
case in other ports such as Hamburg and Rotterdam, while subsidiaries like COSCO (Europe) and
Diamond Line are developing feeder services using locally flagged vessels to perform domestic and
hinterland shipping.
This means that COSCO can compete for and acquire market share in Europe in a way that European
shippers cannot in China, thanks to this protected home market advantage
. That may sound like a
market access and reciprocity issue. However, the unequal playing-field that favours COSCO means
growing market share for that firm, shrinking market share for European shippers, and hence greater
European dependence on COSCO.
COSCO’s vertically integrated value chain further empowers its ability to seize market share
Competing against COSCO for market share is
not just a matter of competing with COSCO – it is about
competing with the State-owned Assets Supervision and Administration Commission of the State
Council (SASAC). This holding company controls and manages China’s 97 centrally owned SOEs.
Much of the value, up and downstream in COSCO’s value chain, is also SASAC-owned or state-owned
by different entities. Upstream, more and more of COSCO’s ships are made by CSSC, which gets its steel
from Baowu and other SOEs, which themselves get their iron ore and coal from state-owned minders
and traders – all under SASAC. Downstream is a similar story. Many of the terminals COSCO uses are
owned by COSCO or CMG; the containers are all made in China, primarily by SOEs; and a key logistics
service provider/co-ordinator is also SASAC-owned. All of these entities are also mainly financed by
China’s state-run banks.
Figure 5: COSCO’s vertically integrated value chain
Source: MERICS.
Because of its robust competition law, such a vertically integrated value chain would be impossible
within the EU. However, that competition law does not apply to the whole value chain in China but
only to the ‘point of contact’ in COSCO itself through its activities in the EU. But that does not stop
IPOL | Policy Department for Structural and Cohesion Policies
20
the obvious and anti-competitive advantages that COSCO enjoys at home from causing distortions in
the common market.
Leveraging those advantages, like leveraging its protected home market advantage, gives COSCO
a clear edge when competing for market share in Europe and beyond, thus exacerbating dependency
risks.
Generally, the individual dependency risk will depend heavily on how much market share in European
ports and shipping markets Chinese firms such as COSCO and CMG can acquire. The higher the market
share, the greater the dependency on Chinese providers and the less capacity European competitors
(which presumably would have lost market share and become smaller) would have if they needed to
fill in as alternate operators and providers.
In a scenario in which COSCO and CMG only marginally increase their market share in the EU over the
coming decade, perhaps owing to economic slowdowns in China that lead Beijing to call on SOEs to
prioritise boosting employment over global expansion, the risk is limited. China’s SOEs are often
tapped to fulfil such social stability roles during economic headwinds. China’s economy is struggling
to get back up to speed post-COVID, making this scenario more possible than in previous years. That
would mean diminished benefits from investment and from potential increases in total trade, but from
a risk mitigation perspective, this scenario is optimistic.
Risk assessment: EU-level dependency risk
Impact level /
Likelihood
Catastrophic
Very serious
China's port and shipping firms
drastically increase market
share in the EU and heavily
displace European firms
Serious
China's port and ship-ping
firms significantly increase
market share in the EU and
displace European firms
Substantial
Limited
China's port and shipping firms
marginally increase market
share in the EU
Very
unlikely
Unlikely Somewhat likely Likely
Very
likely
Source: Authors’ analysis.
If COSCO and CMG manage to increase their investments and market shares in Europe at a pace
comparable to that achieved in the past – albeit likely less on the investment side, which is now subject
to greater scrutiny – they would be doing so in ways that come at the expense of European shippers’
market share. Assuming no significant changes in the EU vs member-state dynamic, COSCO and CMG
may continue to play off Member States against one another to maintain access and expand market
share over the coming decades. This outcome would not only enhance the dependency risks for the
EU but would also generate more significant exposure to other risk types, such as influence/coercion
potential – after all, the ability to influence or coerce is intrinsically tied to how much could be at stake
if Beijing attempts to weaponise dependencies.
Finally, there is a scenario in which European policy makers need to turn to Chinese firms for capital
injection, as many did during the fallout years after the global financial crisis. Were this to occur, COSCO
and CMG would seize the opportunities to invest in more ports and expand their shipping market
Chinese Investments in European Maritime Infrastructures
21
share. This scenario is unlikely, however, as an economic crisis severe enough to push European
governments to take such steps would be likely to bring down China’s economy as well – and, with
current debt levels, Beijing could not again disburse the scale of stimulus it did in 2008. However,
in such a wildcard scenario, dependency risks would grow considerably.
2.2. Piraues, Greece
Background
In November 2008 the Greek government and China’s COSCO Pacific (subsequently COSCO Shipping)
signed a concession agreement worth EUR 831.2m
. The deal covered two of the three piers of the
Piraeus port, which have been since managed by a COSCO subsidiary, Piraeus Container Terminal (PCT).
The initial duration of the agreement was 35 years, but in 2012 it was extended until February 2052.
In 2016, at the height of Greece’s fiscal and economic crisis, COSCO obtained a 51% majority stake in
the Piraeus Port Authority (PPA/OLP) for EUR 280.5m, plus EUR 88m in an escrow account.
11
Under the
terms of the deal, COSCO had the right to claim an extra 16% of the PPA/OLP stock five years later, if
within that timeframe it had completed a set of 11 mandatory investments worth EUR 294m in the
infrastructure of the port (see Annex Table 3). Under the 2016 agreement, COSCO reserves the exclusive
right to use and exploit the land and infrastructure inside the port area.
In August 2021 the Greek government agreed to give COSCO the extra 16% of the PPA/OLP stock, even
though the Chinese company still needed to complete the mandatory investments set out in the 2016
agreement. COSCO undertook to complete the mandatory investments by 2026 or, in case of further
delays caused by force majeure, by 2031.
11
Escrow account is an account opened by a third party for the purposes of holding cash on behalf of two or more contracting parties until
certain agreed contractual conditions for release of the funds from the account have been met.
https://uk.practicallaw.thomsonreuters.com/0-107-6230?transitionType=Default&contextData=(sc.Default)&firstPage=true
SUMMARY OF KEY MESSAGES
• The Port of Piraeus is seen by China as a valuable asset in inter-regional supply chains.
A shutdown or a change to the management of the facility would be likely only under
extreme circumstances.
• COSCO’s presence is perceived as beneficial to the port and to Greece, although this is
based primarily on Chinese narratives. An impact assessment of the investment has
never been considered by Greek authorities.
• A major crisis with China would have a very serious impact – primarily on the Piraeus
economic ecosystem and to a lesser extent on the overall Greek economy – and could
lead to coercion on the part of Beijing.
• COSCO’s presence next to critical civilian and military infrastructure is highly
problematic, in terms of cyber risks and potential sensitive data leaks.
• Greece’s level of preparedness in view of a major crisis with China is low. This applies
to COSCO’s investment in the Port of Piraeus as well.
• A thorough risk assessment of COSCO’s investment requires close co-ordination
with Western partners in terms of technical assistance.
• Similarly, the creation of a crisis management mechanism and mitigation of various
potential risks are possible only in concert with EU and NATO partners.
IPOL | Policy Department for Structural and Cohesion Policies
22
Governance structure
The Port of Piraeus has the following governance structure:
Piraeus Container Terminal (PCT), a 100% subsidiary of COSCO, has been operating Piers II and III at the
Port of Piraeus since 2009. PCT and PPA/OLP are separate legal entities, but are both managed by
COSCO.
Based on the agreement renegotiated in 2021, COSCO now holds a 67% stake in PPA/OLP. The Hellenic
Republic Asset Development Fund (HRADF/TAIPED), Greece’s privatisation agency, holds roughly 7%,
while the remaining 26% stake is in the hands of investors who have bought PPA/OLP shares through
the Athens Stock Exchange. If COSCO’s stake becomes even higher than 67%, this will further
strengthen its hand in managing PPA/OLP. In theory, if HRADF/TAIPED sells its remaining shares and
COSCO buys the shares of the remaining investors, the Chinese company's stake in PPA/OLP could
reach 100%.
The PPA/OLP Board of Directors (BoD) comprises six Chinese and three Greek members, with COSCO
providing the chairman and the chief executive officer (see Annex Table 4). None of the three Greek
representatives is an executive member of the BoD. The Greek members are: an HRADF/TAIPED
representative; the incumbent mayor of Piraeus; and an honorary president of the International
Maritime Union, a Piraeus-based association of shipping agencies. Notably, the mayor of Piraeus is not
included as an ex officio member, but as an independent individual – and so it is not clear if his position
will be filled upon the expiry of his term of office.
Yet another legal entity, 100% owned by COSCO, is the Piraeus Consolidation & Distribution Centre
(PCDC), a facility providing logistics services at PCT. It handles and stores general/dry cargo,
refrigerated and deep-frozen goods, flammable products, chemicals, etc. While goods are at PCDC,
duties and taxes are not levied on them. A further entity under COSCO’s control is the former Greek
company Piraeus-Europe-Asia Rail Logistics (PEARL). In November 2019, during the state visit to Greece
of Chinese President Xi Jinping, 60% of the stock of PEARL was purchased
by Ocean Rail Logistics, a
100% subsidiary of COSCO.
Benefits drawn from COSCO’s investment
There have been apparent benefits generated since COSCO’s arrival in 2008. Before that, Piraeus was
primarily a passenger port, with a limited container handling capacity (throughput) in the range of
700,000 twenty-foot container equivalent units (TEUs). COSCO’s investment has helped to increase the
container throughput by a factor of eight, to 5.6m TEUs in 2019.
Piraeus port's current throughput is estimated at 7.2m TEUs. The PPA/COSCO management insists on
the construction of Pier IV and seeks to boost the port's throughput to between 10m and 11m TEUs. In
this way, Piraeus could compete on an equal footing with Hamburg, Antwerp and Rotterdam. However,
the Greek authorities have yet to approve this proposal. In the absence of such approval, COSCO is
upgrading the existing facilities through rearrangements within the PPA territory (see Annex Figure 7)
However, the container volume at Piraeus has shrunk from its record high of 5.6m TEUs in 2019. This
can be attributed to two main factors: the negative impact of China’s zero-COVID strategy in 2020-
2022; and a series of strikes at PPA due to disputes between the management and local trade unions.
Tensions peaked in late 2021 after a fatal accident
affecting a worker at Piraeus. As a result, Piraeus has
lost its dominant position in the Mediterranean as a container port and has been overtaken by Tanger-
Med in Morocco and Valencia in Spain.
At present, the Piraeus port is performing very well in terms of passenger traffic, as the tourism boom
in Greece has led to a growing number of cruise arrivals. Additional proposals by COSCO envisage the
construction of four hotels. This reflects the priority given by the PPA/OLP management to Piraeus as
Chinese Investments in European Maritime Infrastructures
23
a passenger home port and a significant destination for cruisers. 2022 was a profitable year for
PPA/OLP, mainly owing to the cruise/ferry traffic through the port.
COSCO has stated that in 2021 its investment had the following impact: the economic value added
corresponded to 0.76% of Greece’s GDP and the jobs created accounted for 0.12% of the country's total
employment. These estimates cannot be confirmed by any other source, as Greek authorities have not
commissioned an impact assessment of COSCO’s investment in Piraeus.
Downside of COSCO’s investment
Several disputes in Piraeus and adjacent municipalities have marred COSCO’s investment.
In particular, in 2020 Piraeus City Council expressed disquiet about the absence of an environmental
impact assessment (EIA) for the construction of a new cruise terminal worth EUR 136m. The project has
now been approved, and a contractor selected by COSCO is building the terminal, but with funding
provided through the EU structural funds.
Although environment aspects are not taken into consideration in the risk assessment of this study,
there have been concerns about the environmental impact of mandatory investments and the need
for adequate environmental impact assessments. For instance, all the local and regional authorities
initially dismissed the Strategic Environmental Impact Assessment (SEIA) submitted by PPA/COSCO. In
2022 Greece’s Council of State ruled that PPA had to approve a comprehensive SEIA before
implementing its expansion plan. The SEIA has now been submitted and approved by Greek
authorities.
In addition, there have been concerns about pollution caused in the port and the city of Piraeus. For
instance, the transportation of debris through the streets of Piraeus increased congestion levels in the
city. This mobilised local activists, who blocked the movement of PPA/COSCO lorries in Piraeus in late
2020. Furthermore, local ship repair businesses have strongly objected to COSCO’s plan to construct a
new shipyard in Perama, to the west of Piraeus. Their grievances have been taken to Parliament by the
opposition.
The official position of the Greek Ministry of Shipping is that such a shipyard, controlled by
COSCO, is not envisaged in the 2016 agreement.
A proposal put forward by COSCO/PPA in 2020 envisaged the creation of an e-platform for the
management of all functions of the port. The so-called Hellenic Port Community System (HPCS) was
opposed by a number of business actors in Piraeus who argued that this would lead to a ‘monopoly on
services’ in the hands of COSCO and open the door to unfair competition by other Chinese companies.
In the end, the Ministry of Shipping announced that it would replace HPCS with a National Integrated
Port Community System controlled by the state and included relevant provisions in a law adopted by
parliament in January 2021.
Initial expectations were that a considerably higher number of jobs would be created. In 2016 the
Foundation for Economic and Industrial Research (FEIR/IOBE) carried out a study which referred to
31,000 potential new jobs, whereas the current level of employment is 4,279 jobs (direct, indirect and
induced). As a large SOE, COSCO benefited from the Chinese state's political support to ensure better
contractual terms. Thus, in early
2015 EU state aid regulators ordered the Greek government to recover
certain illegal fiscal benefits granted to PCT and its parent company COSCO. Under the 2008
agreement, the Greek state had granted COSCO tax exemptions in value-added tax (VAT) and
depreciation obligations, which were more favourable
than Greek entities' standard obligations,
including those of PPA/OLP.
IPOL | Policy Department for Structural and Cohesion Policies
24
Risk assessment: Piraeus, Greece
Source: Authors’ analysis.
Individual dependency risk
In the event of a major crisis in relations between the EU and Beijing, for example in the case of an
armed conflict over Taiwan or an incident in the South China Sea, the EU is widely expected to consider
imposing sanctions on China. Greece would be likely to follow suit – even if reluctantly.
12
This would
probably lead to reprisals by China.
The Piraeus ecosystem depends entirely on PPA/OLP, and any disturbance in its operation would be
felt immediately. Greece’s growing dependence on Chinese high-tech imports should also be factored
in. For instance, one Chinese solar panel producer
claims up to a 50% share of the Greek market and all
its products are imported via Piraeus. Possible scenarios of Chinese reprisals would include a
suspension of COSCO operations at Piraeus (which would effectively shut down the entire port) and
imposition of restrictions on Chinese exports to Greece.
However, if COSCO were to shut its operation in Piraeus altogether, China would lose – temporarily, at
least – access to ‘the jewel in its BRI crown’
and a significant transshipment hub in the Eastern
Mediterranean and Southeast Europe. Moreover, COSCO does not have another equally well-
developed hub in the Eastern Mediterranean. What Beijing is more likely to consider is imposing
targeted restrictions on strategically important Chinese exports to Greece.
The impact would be severe for the local ecosystem regarding employment and spin-off economic
benefits in the broader area of Piraeus. On a national scale, Greece might face an acute shortage of
equipment for the country’s green transition, e.g. as solar panels, electric vehicles and batteries, etc.
Further, unless COSCO shuts down its operation in Piraeus altogether, Greek authorities will face a
12
Interview with a Greek state official, 14 January 2023.
Impact level /
Likelihood
Catastrophic
Very serious
Individual dependency risk:
Suspension of COSCO
operations at Piraeus
Hard security risk:
COSCO is
activated as a maritime
militia. PLAN uses Piraeus as
an indirect resupply hub
Serious
EU-level dependency risk:
Complete breakdown of
trade through COSCO
Coercion/influence risk: COSCO threatens
to shrink cargo traffic via Piraeus to
influence Greek policy or European
Council's decision on a China issue
Cyber/data risk:
COSCO port operations give access to local
networks and lead to irregular but
sensitive data leaks of civilian and military
data with broader implications
Substantial
Limited
Very
unlikely
Unlikely
Somewhat
likely
Likely
Very
likely
Chinese Investments in European Maritime Infrastructures
25
tough choice over the legal status of the port. In case COSCO does decide to pull out of Piraeus, the
Greek government will find it difficult to swiftly mobilise another port operator.
EU-level dependency risk
A rough estimate as to the share of Chinese imports into the European market transshipped via the
Port of Piraeus points to a figure between 10% and 15%.
13
Given that in 2022 the worth of Chinese
exports to the EU amounted to some EUR 620bn, Piraeus could potentially account for the entry of
Chinese goods worth between EUR 62bn and EUR 93bn into the EU market. However, the one above is
a highly arbitrary analysis, for the reasons set out below.
The Greek market accounts for only a small share of all the Chinese goods delivered at the Port of
Piraeus. Most containers are transshipped to other countries and are unsealed at the final destination.
Therefore, credible data on the nature, worth and strategic importance of Chinese imports via Piraeus
takes time to come by.
In addition, the railway transport corridor from Piraeus to Budapest, which is part of the core TEN-T
(priority axis No22), still absorbs small amounts of containers at this stage – less than 200,000 TEUs in
2021.
14
While COSCO motherships arrive at Piraeus, goods are then transshipped to other
Mediterranean and Black Sea ports on smaller cargo vessels, known as ‘feeders’. Some of these ports
may be in EU Member States, such as Cyprus, Italy, Malta, France, Spain, Portugal, Bulgaria and
Romania. North African states also claim a considerable share of the cargo traffic via Piraeus. As many
goods transshipped via Piraeus go to North Africa rather than to Europe, the role of the Piraeus port in
the overall European supply chain may be more limited than generally assumed.
Furthermore, Greece has yet to adopt an FDI screening mechanism. The Greek government has
prioritised FDI attraction. Although Regulation 2019/452
came into force in October 2020, a year later,
the Greek parliament passed Law 4864/2021 on Strategic Investments, which moves in the opposite
direction.
The Greek government is extremely reluctant to consider changing the status of the Piraeus port. Even
in the case of a major international crisis and a collapse of relations between the EU and China, Greece
is unlikely to challenge the 2016 agreement with COSCO, as amended in 2021.
A complete breakdown of trade through COSCO, arising from an immediate suspension of the
operation of the Chinese forwarder in European ports, including Piraeus, is unlikely. Given the
headwinds that China’s economy is currently facing, Beijing would have to consider the risk of losing –
even if temporarily – Piraeus as a logistics hub and entry point to markets in the EU and the broader
Southeast Europe-MENA region. Chinese producers affected by this development would find it difficult
to divert their exports to other parts of the world swiftly. However, the impact would be severe, given
the EU’s dependence on Chinese imports transported by sea, including via Piraeus. The
Port of Piraeus
is part of the core TEN-T as major hub in the Eastern Mediterranean region (for highways, railways and
transshipment), disruptions in Piraeus therefore would have direct spillovers to other connected hubs
in the EU (i.e., the Helsinki-Valletta corridor and the Hamburg/Rostock-Burgas/TR Border/Piraeus -
Lefkosia corridor).
The imposition of partial countersanctions by China, for example restrictions on essential exports to
the EU, is more likely. Partial Chinese countersanctions, such as restrictions on specific exports to the
EU, could include rare earths (which is already the case with gallium and germanium), batteries for
13
Interviews with representatives of the business community in Piraeus, 26 July 2023.
14
Interview with PPA chairman Yu Zenggang, 27 May 2022.
IPOL | Policy Department for Structural and Cohesion Policies
26
electric vehicles, solar panels, etc. Piraeus would be a relatively small, but not insignificant, entry point
in the overall European supply chain.
Coercion/influence risk
Greece is one of the most China-friendly EU Member States and, like many other European
governments, wishes to avoid a head-on clash with Beijing. While the current government is unlikely
to repeat the goodwill gestures made to Beijing by its predecessor in 2015-2019, Athens carefully
avoids stepping on China’s toes on ‘sensitive’ political issues, such as the status of Xinjiang, Tibet and
Taiwan, and consistently abstains on related UN resolutions. Greece has neither commented on China’s
coercion against Lithuania
15
nor criticised Beijing’s ‘neutral’ stance towards Russia’s invasion of Ukraine.
However, Greece has not opposed EU sanctions against China on human rights related issues and
cyber-attacks.
In the event of a major international crisis, Beijing would seek to split the EU through ‘China-friendly’
voices, including Greece. Coercion cannot be precluded, but it is likely to be discreet rather than
undisguised. China may consider a range of possible responses, such as: exerting pressure on the Greek
government by threatening to freeze bilateral relations; restricting strategic exports to Greece, without
announcing an official embargo; quietly diverting traffic to other ports in the Mediterranean; and
explicitly informing Greek authorities that, if they support EU decisions, COSCO will halt investments
and will redirect flows to other destinations.
Although the complete shutdown of the Piraeus port as a consequence of economic coercion is
deemed highly unlikely, the port could be used by Beijing as a lever, given that COSCO’s investment is
a significant part of the Greek government’s FDI attraction strategy. However, Piraeus is a major
Chinese asset in the Mediterranean, and Beijing would not like to jeopardise its status through extreme
political pressure on Athens.
Cybersecurity/data risk
The Hellenic Port Community System (HPCS) dispute illustrates COSCO’s interest in data collection and
management, which could have economic and security implications. COSCO certainly has the
opportunities and resources to create an infrastructure that would allow it to ‘eavesdrop’ on Greek state
and military services in the broader area of Piraeus. The impact could be severe for state, international
and military infrastructure (Ministry of Shipping, Coast Guard, Greek Navy, visiting NATO military
vessels and global telecoms networks). PPA has granted nine offices and exterior space totalling a
surface of 1,100 sq metres to the Special Forces (KEA) of the Greek Coast Guard. COSCO has borne the
cost of the development and renovation of these sites. It is unclear to what extent the facilities are
equipped with the requisite safeguards in case Chinese listening equipment is installed in the area.
The ‘symbiosis’ of COSCO and several Greek state institutions in the same area (Ministry of Shipping,
Coast Guard and the Salamina naval base) is highly problematic. It is noted that the Greek naval base
at Salamina is less than five nautical miles away from Piraeus, i.e. within a range that allows – in theory,
at least – for the use of listening devices. There are (unconfirmed) reports of a secret telecoms unit at
PCT, with access granted to very few Chinese representatives.
A critical factor is the low level of awareness and understanding of cyber threats among Greek public
authorities. Notably, in early 2020 COSCO presented its HPCS platform to the Greek Ministry of Digital
Governance, which initially accepted it
. However, the local business community in Piraeus reacted
vehemently and only then did the Greek government realise the potential threat.
15
In 2021, Lithuania became the sixth European country to face an episode of Chinese economic coercion. The episode followed the
opening of a “Taiwanese Representative Office” in Vilnius in November 2021. https://merics.org/en/executive-memo/dealing-chinas-
economic-coercion-case-lithuania-and-insights-east-asia-and-australia
Chinese Investments in European Maritime Infrastructures
27
Greece has a National Cybersecurity Strategy, published in 2018 and updated in 2020. It focuses on
security policies for ICT systems in the public sector, and co-operation with the competent national
authorities, The European Union Agency for Cybersecurity (ENISA), etc. It is likely that this strategy
requires an update, or a specific chapter on potential cyber threats related to COSCO’s presence in
Piraeus.
Piraeus is often visited by military vessels from other NATO members, including the US. For instance,
the aircraft carrier USS Gerald R. Ford visited Piraeus
in late July 2023, although it did not enter the port.
It is the US navy's most advanced aircraft carrier, with 23 new technologies that operate with a 20%
smaller crew than Nimitz-class carriers. Furthermore, there are indications that calls by US military
vessels will be more frequent in the future. It is reasonable to assume that Chinese intelligence services
will be interested in collecting data about US advanced military technologies.
Hard security risk
The Chinese navy occasionally visits ports throughout the region, usually after concluding counter-
piracy patrols in the Gulf of Aden and before returning to China. Chinese warships have visited Piraeus
several times since 2002, most recently in October 2017, when the Greek and Chinese navies held one-
day joint drills. Despite the symbolic nature of this exercise, port calls of Chinese warships feed into the
debate on the potential dual use of COSCO’s investment project. Concerns over possible military use
are not entirely unwarranted, despite assurances by Greek authorities that they would never allow this.
In June 2015 the Chinese government announced that all civilian shipbuilders had to ensure that their
new vessels were suitable for military use in emergencies. This new strategy is designed to enable China
to convert the considerable potential of its civilian fleet into military strength
to protect strategic lines
of communication and maritime support capabilities. In other words, all new COSCO container ships
docking in the port of Piraeus will – in theory, at least – be capable of being converted into military
vessels at short notice and used in military operations.
As argued elsewhere, Piraeus port is seen by Chinese authorities as a valuable asset. They would be
unwilling to sacrifice it by turning it into a military facility, as this would justify the suspension of
diplomatic relations between Greece and China. Above all, Greece’s commitment to NATO, in
conjunction with the defence agreements between Greece and the US on the one hand, and Greece
and France on the other, render Chinese military activism in the Mediterranean virtually impossible.
In case of unrest in North Africa and a repeat of the Libya-2011 crisis, China will be called upon to
protect its assets and evacuate its citizens. Yet, it is unlikely that Greek authorities, as well as NATO
partners, would agree to the Piraeus port being used by China’s navy in such a rescue operation. In
addition, China may have other options in the Mediterranean, such as existing facilities or terminals
under construction in Egypt (at Alexandria, Port-Said and El-Dekheila) or Algeria (Cherchell).
Last but not least, in a major international crisis involving China, the main battle theatre is expected to
be in the Indo-Pacific, not the Mediterranean Sea. In such a scenario, the US 6th Fleet would probably
block the Suez Canal and thus prevent Chinese military and merchant ships from entering or leaving
the Mediterranean.
IPOL | Policy Department for Structural and Cohesion Policies
28
2.3. Hamburg, Germany
Background
a. Chronology
In June 2021 Hamburger Hafen und Logistik (HHLA) announced
that it was negotiating with Cosco Sea
Ports Limited (CSPL) a strategic minority share participation in the Container Terminal Tollerort (CTT).
In September 2021 HHLA announced that COSCO and HHLA had finalised the deal, with CSPL to
become a 35% equity owner in CTT. COSCO announced that it would use CTT as a ‘preferred hub’ and
facilitate two Far East services, one Mediterranean service and one Baltic feeder service through the
terminal.
However, in late 2021, the German Federal Ministry of Economic Affairs and Climate Action (BMWK)
asked other ministries for information and opinions on the deal. The Ministry of the Interior (BMI) tasked
the Federal Office for Information Security (BSI) to ascertain whether CTT is critical infrastructure. The
BMI forwarded this to the BMWK and noted that this is a sensitive deal. In January 2022 new
KRITIS
regulations, which determine what counts as critical infrastructure and how it should be managed,
came into effect. It is determined that CTT should be registered as critical infrastructure, although the
CTT IT systems had already been deemed such since 2018.
SUMMARY OF KEY MESSAGES
• COSCO’s acquisition of 24.99% of the Container Terminal Tollerort in the Port of Hamburg
is seen by COSCO as a strategic investment in a port that it aims to develop as a
regional hub.
• Hamburger Hafen und Logistik has argued that, because 30% of trade flows through
Hamburg either come from or go to China, cementing the relationship with stakes in a
terminal will generate development and employment opportunities in Hamburg and
Germany more broadly.
• The investment is still new, and hence measurable impacts have yet to materialise.
However, to the degree that the investment unlocks new demand for import and
export, it will benefit the city, the country and the EU.
• However, if the investment and increased trade flows result merely in redirection of
existing total flows through to Hamburg, the benefits will be localised, probably at the
cost of other ports, and there will be limited or no net benefits at the EU level.
• Dependency risks will be scaled to the amount of additional throughput generated
by COSCO and to what degree it is able to win market share.
• Influence risks are the most likely to materialise, as they already have in many ways,
with much of the debate on approving the investment highlighting fears that its rejection
would prompt COSCO to go elsewhere, and so Hamburg would lose opportunities.
Future influence risks will grow relative to COSCO’s overall market share in the port,
although compared with the broader Germany-China economic relationship, these are
likely to remain a small part of broader dependency risks.
• Cybersecurity/data risks are marginally increased, but with COSCO already having
two offices in the city and with COSCO vessels already using the port extensively, those
risks are present irrespective of the CTT investment.
• Hard security risks are very limited, owing to Hamburg’s geographic location, which is
surrounded by NATO and far from any theatre that the PLAN would be active in for the
foreseeable future.
Chinese Investments in European Maritime Infrastructures
29
The European Commission reportedly reviewed the deal through the Investment Screening
Mechanism (although this was not publicly confirmed, as reviews are done internally and
recommendations are made directly to Member State authorities, with no public comment on
individual cases) and
recommended against approval. However, as the mechanism is not binding, it is
left to the Member State to approve or reject an investment, and in this case, Berlin seems to have
chosen its own path.
In October 2022 the federal government announced that COSCO would be allowed to invest in CTT so
long as shareholding is below 25%, as it would have little direct power over strategy-making, nor would
it have a position in the supervisory board, thus making COSCO a largely ‘silent partner’. However, while
not through legal means, COSCO is likely to have a meaningful impact on the direction of the terminal
through its position as a sizeable investor, but also as a significant user and customer of the terminal
through its shipping services, which it has the stated intention of expanding in the port.
Six ministries
opposed the approval, but the Chancellery reportedly pushed the approval through. Several months
later, HHLA registered CTT as critical infrastructure (after the deadline, but the authorities decided not
to pursue this in court). Finally, in June 2023, HHLA and COSCO
signed contracts handing over a 24.99%
share in the HHLA subsidiary Container Terminal Tollerort GmbH to COSCO subsidiary CSPL.
b. Governance structure
The deal set CSPL’s shareholdings below 25%, leading to a 24.99% final shareholding level in the final
contract. Notably, one provision of the agreement includes that CSPL must not, through other means,
obtain effective participation in control rights, meaning that CSPL or COSCO could not, through
another Chinese SOE that bought shares in CTT and then sold them to CSPL, exceed its current
ownership level. As such, unless a new arrangement is agreed to, COSCO will only have a ‘silent partner’
level of ownership and, therefore, cannot directly influence CTT and HHLA operations or strategy
making. Finally, the 24.99% ownership does not leave COSCO with exclusivity rights
for CTT. Other
shipping companies will be able to use CTT as paying customers.
Benefits drawn from COSCO’s investment
When first announced, the sale of 35% of CTT was set for EUR 99m
, with EUR 65m for the shares and
EUR 34m to pay off CTT debts as part of the investment deal. The transaction has yet to be completed
or disclosed at the time of writing. It therefore remains to be seen if or how much the cost has changed
since the shareholding has dropped to 24.99%. If the whole sum is proportionally reduced to a 24.99%
level, the total cost is EUR 70.686m.
16
If the debt is paid off in full and the reduced shareholding has no
bearing, the total cost will be EUR 81.41m.
CTT was 100% owned by HHLA before the sale, so HHLA and its shareholders will be the beneficiaries.
However, it is still being determined whether that sum will be reinvested into the port or elsewhere, or
if it will be distributed to shareholders through dividends, be used to pay off other liabilities, or any
combination thereof. In any case, the HHLA and shareholders will be the immediate beneficiaries of the
deal.
HHLA also argues that COSCO’s investment will make Hamburg a preferred hub for COSCO and will
secure sustainable development and job opportunities, as it stated in a press release
on the final
agreement. COSCO largely agrees, as it made clear in its press release on the same occasion. Both sides
noted that around 30% of the trade that passes through the port goes to or comes from China.
16
As various sources are used to compile the data on Chinese FDI in the European maritime sector, the currency as provided by the data
source is reported.
IPOL | Policy Department for Structural and Cohesion Policies
30
These assessments are generally accurate. The benefits of the investment are tangible for Hamburg
and for Germany and some of its neighbours, especially if it leads to further expansions of COSCO’s
operations in Hamburg as a critical hub for hinterland shipping and as a transshipping hub for the Baltic
countries and Germany with the rest of the world. That potentially could generate further demand for
companies upstream from COSCO in the region – the Port of Hamburg itself, the inland terminals along
the Elbe basin, the freight rail providers and truckers that engage in intermodal transit by bringing
goods to Hamburg to then ship by sea, and all of the suppliers of those firms as well. That would be
potentially beneficial for economic development, employment, economies of scale for those upstream
companies, and tax revenue for the relevant jurisdictions.
Those benefits for the HHLA itself and its shareholders; for the City of Hamburg, its hinterland, and its
transshipping hub connections; and for the workers, companies, and jurisdictions upstream of the
value chain; are all potentially real if a meaningful increase in COSCO’s activities in and through
Hamburg materialise. But, like all opportunities, they must be weighed against their risks.
Downside of COSCO’s investment
As the final transaction has (at the time of writing) not yet been completed, let alone any follow-up and
change in COSCO’s activities in the port, there are no examples of downsides explicitly related to the
investment. Some downsides unrelated to security and resilience risks could emerge as they have in
other COSCO invested ports, such as issues around labor rights and protections as well as
environmental impacts. However, those issues are already well covered under German and EU
jurisdictions, so should they emerge, it would be due to failure by the relevant authorities to enforce
rules when COSCO is noncompliant. Risks are undoubtedly present as a consequence of the investment
and are explored in the risk assessment below.
Risk assessment. Hamburg, Germany
Source Authors’ analysis.
Individual dependency risk
The individual dependency risk will depend heavily on how COSCO’s investment in CTT develops over
time. Suppose that the investment has a limited or marginal effect on the trade facilitated by COSCO
vessels using Hamburg as a hub. In that case, dependency risks are low as the demand for shipping
Impact level /
Likelihood
Catastrophic
Very serious
Cyber/data risk:
COSCO operations become a platform
for
cyber-attacks and espionage,
China
gains extensive access to vital
systems and data, including German
and NATO military secrets
Serious
Individual dependency risk:
COSCO
threats to shift
trade flows materialise
Coercion/influence risk:
Coercion
leads Germany to block a European
Council decision
EU-level dependency risk:
COSCO significantly expands
its footprint in the Baltic,
cementing access and hubs
across the entire common
market
Substantial
Individual dependency risk:
Hamburg becomes
a critical hub,
then
Taiwan conflict breaks down trade
flows
Coercion/influence risk:
Discreet or implicit coercion
risks influence German policy
making
Limited
Hard security risk:
PLAN indirectly supplied by COSCO
through Hamburg in covert manner
Cyber/data risk:
COSCO as a platform for cyber
-
attacks
and espionage obtains
irregular but useful information
on target subjects
Very
unlikely
Unlikely Somewhat likely Likely Very likely
Chinese Investments in European Maritime Infrastructures
31
services could, in principle, be quickly met by a European shipper. But in the long term, if the
investment leads to significant new trade flows, there is greater potential for dependency risks to
emerge. If such conditions occurred, they could impact the port in various ways.
If, for example, years from now, COSCO responded to a significant decision by German policy makers
by shifting logistics chains away from Hamburg and the Elbe hinterland towards Rotterdam and
Antwerp and the Rhine hinterland, localised impacts could be substantial as demand at the port would
drop. COSCO would have to eat into its margins to cover its costs, but it would hardly be the first time
a Chinese SOE prioritised politics over profitability. This concern was expressed during the debate
around the screening of COSCO’s investment – that if it were blocked, Hamburg would be punished,
and investment and trade flows would instead go to other ports.
The impact would depend on the amount of port throughput dependent on COSCO, which could be
redirected. That could lead to localised job losses and other ecosystem impacts in Hamburg, while
generating more demand in other ports, which could lead to a political backlash from Hamburg’s port
workers and those who rely on them, who would be angry that their government ‘instigated’ the
conflict that led to redirection and benefited workers in other countries at their expense.
A similar, more considerable impact could result if open conflict breaks out in the Taiwan Strait. If
European sanctions, Chinese suspension of trade, or a general breakdown of trade occurs, leading
COSCO to suspend operations in Hamburg (and elsewhere), the knock-on impacts for Hamburg could
be significant. A major reduction or complete breakdown of trade between China and Europe would
be catastrophic for all ports and the economy overall. But, if COSCO had made Hamburg its hub for the
Baltics and northern-central Europe with feeder operations, regional supply chains could be disrupted
as well if Hamburg is too dependent.
EU-level dependency risk
Regarding the port investment, acquiring a minority share in CTT adds only a small amount to
EUR 10.2bn of Chinese investment in EU maritime infrastructure accumulated during 2004-2021.
Instead, EU-level dependency risk, if it emerges, will come about if COSCO does indeed make CTT its
preferred hub for northern Europe and the Baltics. If this leads to significant new COSCO operations in
the region, that would mean that COSCO, and its close relative CMG, has extended itself across the
entire range of European shipping markets: Hamburg as the new hub to build market share in the north
and the Baltic region, as well as the Elbe hinterland; Rotterdam and Antwerp to build market share in
the English Channel region, as well as the Rhine hinterland; Valencia and Vado for the western
Mediterranean; and Piraeus for the eastern Mediterranean, Black Sea and as a gateway into Europe
more broadly.
If COSCO significantly expanded its Baltic and Northern Europe operations over the coming decade,
that could mean lower shipping costs for regional importers and exporters. However, this would be
likely to come at the expense of European shippers
that, as private companies, struggle to compete on
price because of their fiduciary responsibility, which COSCO, as a Chinese SOE, lacks. That enhances
dependency risks, not just for Germany but for the EU as a whole as COSCO and other Chinese firms
secure a comprehensive footprint across Europe’s shipping markets that facilitates further market
share acquisition and the dependency risks that could come with it.
IPOL | Policy Department for Structural and Cohesion Policies
32
Coercion/influence risk
Unlike some other EU Member States, Germany and German companies have not faced instances of
direct and explicit economic coercion from Beijing.
17
Nevertheless, some politicians, officials and
business leaders in Germany have publicly commented in support of/opposition to China-related
decisions explicitly and implicitly owing to fear of economic retaliation, which has
become more
widespread under Xi Jinping. The debate around approvals for COSCO’s Hamburg investment featured
such commentary, including HHLA spokespeople who argued that jobs were at risk, as was the port’s
competitiveness with Rotterdam and Antwerp.
There is potential implicit coercion that China could shrink cargo traffic via Hamburg to pressure
Germany, given German policies that may not be to Beijing’s liking. In the debate about COSCO’s
investment in Hamburg, implicit threats were voiced not by China itself but by local leaders
in support
of approving the investment. These were focused on theoretical and potential shifts in yet-to-
materialise investment and subsequent increases in port usage by COSCO. It is not difficult to imagine
how much more influence COSCO and China will have after the investment and subsequent port usage
increase have materialised.
It is unlikely that COSCO’s implicit influence on its own would be enough to change any major policy
or decision in a significant way. Instead, the serious nature of the problem arises not from any individual
issue, but from small but meaningful influence over many decisions – after all, the overall level of
interdependencies in the broad Germany-China relationship (or the EU-China relationship
) already
influences policy making and is an omnipresent feature of the debate in Germany (EU). While this is
true of all major commercial actors operating within a country – companies are wary of incurring the
wrath of their local jurisdiction, just as local jurisdictions are wary of scaring off companies – the fear is
heightened with China’s SOEs, because they are a potential channel for coercion as part of Beijing’s
toolkit. The effect can accumulate over time and even small concessions can eventually have larger
impact on Germany-China relations.
That said, the level of influence is likely to be lower than that of Piraeus on Greek policy making. If, for
example, Beijing wanted to use either port as a point of pressure on German or Greek authorities to
disrupt or block a European Council decision requiring unanimity, it would be likely to find it easier to
make that argument through Piraeus. However, the investment in Hamburg is one small part of a much
larger economic relationship between Germany and China, which means that it could be part of a more
significant pressure point that could influence Germany’s decisions in the Council.
One additional area of concern is the impact that the investment and potential increase in usage by
COSCO would have on the TEN-T projects related to Hamburg, its hinterlands, and its transhipping
network. As TEN-T focuses on intermodality and connectivity, the
maritime, inland waterway, rail, and
road projects that interface with the port of Hamburg could be open to positive or negative impacts
from increased activity from COSCO. Positive impacts could include additional use of TEN-T supported
projects, which could boost their ROI, though only if it means that new demand is unlocked – as
discussed above, if it just means COSCO has replaced other companies as transportation suppliers to
hinterland and transshipping customers, then it won’t yield additional throughput. However, the same
market share/dependency concerns mentioned above could also apply to TEN-T supported projects.
On a similar note, if COSCO’s investment and potential increased use of the Port of Hamburg leads to
shifts in transportation flows – say, from the Rhine basin and Rotterdam and Antwerp, or from the
17
One minor exception has been Leica Camera, in response to an advertisement featuring the Tiananmen Square massacre. There is also
the indirect example of German automotive component firms impacted by Chinese coercion directed at Lithuania for their supply chains
there.
Chinese Investments in European Maritime Infrastructures
33
Vistula basin and Gdansk – this could positively impact investments connected to Hamburg at the
expense of those connected with Rotterdam, Antwerp, and Gdansk.
Cybersecurity/data risk
Cybersecurity and data risks presented by COSCO in Hamburg potentially exist without the investment
in CTT and are likely to be expanded only in marginal ways through that investment. Regarding
cyber/data risk potential, COSCO already has two offices
in the city centre of Hamburg, through which
it could access networks, gather data, covertly transfer data, etc. Furthermore, COSCO vessels regularly
pass through the port terminals and could be platforms for cyber and data risks. HHLA has stated that,
given COSCO’s 24.99% stake, the firm would not have access to internal IT systems. However, if COSCO
intends to use CTT as a primary berth for its container ships in the future, it seems unlikely that COSCO
would not insist on its own preferred hardware and software solutions for its port operations. Those
might not interface with the CTT and HHLA IT systems, but they could present other risks.
Nevertheless, COSCO, like all Chinese firms, is subject to the National Security Law, which can enlist
Chinese persons in intelligence gathering, even overseas. As a ‘backbone enterprise’ for national
security purposes, COSCO certainly possesses the potential motivation to support intelligence
gathering, including through its operations in Hamburg. That does not mean it has been actively doing
so, but as geopolitical tensions grow between China and Europe, so will the desire for access to better
intelligence in Beijing. Additionally, NATO vessels regularly
visit the Port of Hamburg, giving even
further reason for Beijing to use its national champion in gathering data and intelligence.
Such risks should be monitored, and rules such as those relating to GDPR should be robustly enforced.
This burden is likely to grow quickly and extensively, not necessarily because of any assumptions about
COSCO itself, but because of the rollout of more technologies into shipping and port operations. As
more smart shipping, digital transition, 5G, sensors and other technologies are integrated, overall
exposure to cyber and data risks will increase significantly.
Hard security risk
COSCO plays a critical parallel role with the PLAN, and its involvement in unforeseeable events should
be considered. That said, unlike in other ports, COSCO’s operations in Hamburg have limited hard
security risks regarding its formal logistics role.
As to COSCO’s logistics role, it is difficult to imagine scenarios in which COSCO would be able to use a
north European port where it only controls 24.99% of one terminal to transfer PLAN supplies
clandestinely. For the foreseeable future, beyond exercises with strategic partners such as Russia and
developments in the Arctic region (as has occurred in the past
), there are no evident reasons why PLAN
vessels would be anywhere near Northern Europe and need resupplying. That said, this risk could, in
principle, be mitigated with closer monitoring and through robust customs compliance regimes.
IPOL | Policy Department for Structural and Cohesion Policies
34
2.4. Kumport, Turkey
Background
China and Turkey have enjoyed a remarkable surge in trade activity since the 2000s, characterised
mainly by the exchange of semi-finished products from Turkey and finished goods from China. As
Turkey's relations with the EU and the US cooled, the country has come to see
China as a promising
partner for further development and improvement of political, military and economic relations.
However, although Turkey’s BRI membership has been formally in effect for over seven years, Chinese
investments in Turkey remain relatively limited. According to data from the Central Bank of the
Republic of Turkey (CBRT), Chinese FDI accounted for just 0.6% of the country’s total FDI stock in 2022.
BRI investments in Turkey amounted to EUR 3.2bn, representing only
1.3% of BRI investments globally.
But even though the size of China’s FDI in Turkey is relatively small, its sectoral structure shows that
China’s footprint in Turkey’s critical infrastructure is sizeable.
Turkey’s strategic geographic location in the Mediterranean and Black seas makes it a significant
regional power in maritime transportation and an important EU Neighbourhood country to analyse.
Turkey enjoys extensive sea connections, with a network of nearly 200 ports and piers, making it a vital
element of the extension of the Trans-European Network for Transport (TEN-T). Within its maritime
infrastructure, 27 ports are classified explicitly as container ports.
18
The seaports with most significant
trade capacity are concentrated in the Ambarli district of Istanbul, considered a central hub for
transshipment.
In this area lies the Kumport Terminal, one of the largest Chinese FDI projects in the country, with a
total investment of EUR 829m.
19
Situated on Istanbul’s European side, Kumport was the third-largest
container terminal in Turkey as of 2011. Serving as a strategic gateway to the Black Sea region, the
terminal caters to Istanbul’s import and export demands. It also plays a significant role in facilitating
trade and logistics activities, making it an essential component of Turkey’s maritime infrastructure.
18
Maritime transport accounted for 57% of Turkey’s total exports and 53% of its total imports in 2022.
19
The remaining 35% of Kumport's shares are directly owned by Turkac No.1 SARL.
SUMMARY OF KEY MESSAGES
• China appears to have been relatively unsuccessful in using the full potential of the
Kumport Terminal, and the project has had limited impact on the Turkish economy. The
terminal faces operational challenges and has been operating below its potential.
• The potential impact of the Kumport investment project on the overall maritime
operations in the region is limited.
• Turkey's macro-financial and political instability, as well as geopolitical issues, have
deterred further Chinese investment into the country.
• Should China decide to invest in other Turkish ports, the potential risk of excessive
Chinese influence on the country’s maritime infrastructure would be significantly
higher.
• Higher investment from China could further exacerbate Turkey’s macroeconomic
imbalances.
• Turkey's active engagement with the BRI raises concerns for the EU about China's
increasing influence in the region. Further deepening of economic and political ties
between China and Turkey and increased investment into Turkey’s maritime
infrastructure could increase Turkey’s vulnerability to China’s political and economic
influence. This would raise risks for the EU and other Western countries.
Chinese Investments in European Maritime Infrastructures
35
The project saw three Chinese SOEs – China Merchants Port Holdings (CMPH), COSCO Pacific Limited
(CPL) and China Investment Corporation (CIC) – building a consortium (Euro-Asia Oceangate SARL) to
acquire 65% of the shares in Kumport Terminal for a total of EUR 829m. COSCO justified
the investment
by emphasising the potential business synergy with its existing investment in the Piraeus Container
Terminal in Greece and the opportunity for co-operation with CMPH, given its expertise in overseas
port operations.
The speech by the Turkish president, Recep Tayyip Erdogan, at the Belt and Road International Forum
in Beijing in May 2017 indicated Turkey's interest in expanding co-operation with China
; however,
other investment projects have yet to materialise. China has hesitated to invest in Turkey, with macro-
financial and political instability seen as among the main obstacles. Geopolitical factors, including
Russia's influence in the Northern Corridor and strained relations between Istanbul and Beijing over
issues concerning the Uyghurs, have also impacted investment prospects. Additionally, the port and
railway infrastructure in the region exhibits notable deficiencies, making it challenging to achieve
economies of scale. Currently,
around 90% of the total port capacity in the country needs rail
connections, presenting a significant obstacle to efficient transportation and trade.
Turkey sought to attract Chinese investment into numerous other projects, such as the port of Çandarli,
the construction of the Istanbul Canal (Kanal İstanbul) and the Third Bridge over the Bosphorus in
Istanbul. All the negotiations so far have been unsuccessful as the disagreements between both sides
were too major to close the deal. It is believed
that the Chinese side stalled negotiations, demanding
conditions that Turkey could never have accepted.
Benefits drawn from COSCO’s investment
Following its acquisition, the Kumport Terminal underwent development with new investments,
significantly increasing its container handling capacity from 1.3m TEUs in 2015 to 2.1m TEUs by 2022
.
However, the actual container handling in the port has not increased so far, and Kumport has operated
below its potential, experiencing volatile profits and a diminishing share of Turkey's overall container
handling (see Annex,
Table 5Table 5). The main reasons for the lacklustre results are believed to be
logistical difficulties arising from the absence of a rail connection, with the nearest logistics centre
located 20 km away in Halkali. The nearby presence of other major ports, which offer better
connections and provide direct access to larger markets, makes it difficult for Kumport to maintain its
competitiveness. Overall, the complementarity with nearby ports appears not to have materialised as
anticipated by COSCO at the time of the investment, with macroeconomic and institutional challenges
further hampering the port’s prospects.
Risk assessment : Kumport, Turkey
Impact level /
Likelihood
Catastrophic
Very serious
Hard security risk:
Use of the
terminal for
military purposes
Serious
Individual dependency risk: China
invests in other major Turkish ports
expanding its influence over the country’
s maritime infrastructure
Coercion/influence risk:
Worsening Turkish trade deficit
with
China
opens space for soft power
influence
Substantial
Cyber/data risk:
Disruptions in national
security
due to cyber-
attacks and espionage
EU-level dependency risk:
Deepened
partnership between
China and Turkey, amid cooling
relations with the EU
Limited
Very unlikely Unlikely Somewhat likely Likely
Very
likely
Source: Authors’ analysis.
IPOL | Policy Department for Structural and Cohesion Policies
36
Individual dependency risk
Assessing the risks associated with the Kumport Terminal suggests that significant individual
dependency on China is unlikely. Even if the consortium were to cease operations at the terminal,
maritime activities are not expected to suffer substantially. Istanbul port, also known as the Port of
Haydarpasa, and Kocaeli port, also known as Derince port, handle most foreign trade freight operations
in the region. Both ports are under state control and are operated by the Turkish State Railways.
Therefore, the potential impact on the overall maritime operations in the region is limited, mitigating
the risk of over-reliance on a single player.
Additionally, the Kumport Terminal serves a diverse range of shipping lines, with 15 companies
operating across 11 routes. Only two of these companies are Chinese: COSCO and OOCL. Notably,
COSCO is actively involved in one specific way, known as the NET route (Figure 6), using the port mainly
for feeder lines. This indicates that the terminal's dependency on COSCO Shipping is limited, adding to
the overall assessment that economic risks appear unlikely to be significantly impacted by COSCO's
operations at Kumport.
Figure 6: COSCO Shipping Lines - NET Feeder Route
Sources: COSCO Shipping Lines; European Transport Maps
Should China decide to invest in Mersin port, situated on the north-eastern coast of the Mediterranean
Sea in southern Turkey, the potential risk of individual dependency would be significantly higher. Given
its status as one of Turkey's largest harbours and the country's primary gateway to the Mediterranean
Sea (alongside Iskenderun port), Mersin plays a vital role in handling around 9.1% of Turkey’s overall
foreign trade (together with Iskenderun, the share is 27%). Any substantial Chinese investment or
operational changes in Mersin port could significantly impact Turkey's maritime operations and trade
dynamics, accentuating the need for a thorough risk assessment before such ventures.
EU-level dependency risk
Overall, as the Kumport Terminal operates below its potential, the EU-level dependency risk is not high.
However, deepening ties between China and Turkey could mean substantial risks for the EU,
Chinese Investments in European Maritime Infrastructures
37
particularly in view of Turkey’s EU candidate status. Although the EU and the US have not explicitly
reacted to the BRI investments in Turkey, they have expressed concerns
about the geopolitical
implications of the BRI and China's growing influence in the countries involved. One of the key EU
concerns is the potential impact of China’s FDI on the distribution of economic influence and trade
dynamics in the region, which could challenge the EU's position and role.
Furthermore, given the strategic nature of the Black Sea region from the perspective of the EU, the
presence of China in the wider region needs to be carefully assessed. Turkey is a member of the OSCE
(Organization for Security and Co-operation in Europe) and NATO. In this light, Turkey’s aspirations to
strengthen military co-operation with China, driven
by potential security concerns along the project’s
maritime route, could have serious implications for regional security and stability. Moreover, it brings
about questions of broader influence on human rights and geopolitical dynamics.
Coercion/influence risk
There is also an indirect risk for Turkey, linked to the increasing deficit in its trade with China, which,
according to the Turkish Statistical Institute, accounted for over 20% of Turkey's total trade deficit in
2022. Higher investment from China would lead to the accelerated growth of imports, which could
further exacerbate Turkey’s macroeconomic imbalances. In this context, a severe risk stems from
Turkey's growing trade deficit with China, which could open up space for soft-power influence.
Furthermore, given that less developed economies find themselves in capital-constrained positions,
they are more prone to seek out investments with heightened security risks. In this sense, the risk of
coercion and influence is higher for Turkey than for the more developed EU economies.
However, from Turkey's perspective, the investment in the Kumport Terminal by Chinese SOEs is seen
as a minor risk in terms of Beijing's coercion or influence over the country's politics, either actively or
passively. The government's primary focus is on enhancing economic co-operation with China, and the
investment is viewed as an opportunity to enhance its underdeveloped infrastructure and expand
trade opportunities. Thus, the economic benefits of Chinese investments are believed to outweigh the
security concerns. Although the Turkish government has implemented measures to alleviate the
impact of Chinese imports in specific industries, the maritime sector is not among the prioritised areas
for such actions. This points to the need for a comprehensive evaluation of the potential risks of the BRI
infrastructure investments in Turkey and increasing EU dependency on China.
Cybersecurity/data risk
Given that Kumport represents only one of the multiple ports in the Istanbul area, with more
economically significant ports falling under the control of the Turkish State Railways, the incentive for
it to be used for data breaches and economic espionage is very low. The diversified port structure and
the reality that Kumport operates below its potential also limits the threats related to operational
disruptions brought on by potential cyber-attacks. Meanwhile, Turkey has been making substantial
progress in cybersecurity, as demonstrated by its very high score in the Global Cybersecurity Index
,
outpacing even some of the most economically developed countries in the world. This allows for sound
mitigation policies to be implemented, minimising cybersecurity risks associated with FDI.
Hard security risk
As emphasised before, Turkey is located in a highly geostrategic location on the southern Black Sea,
and is the easternmost NATO member. The country is also home to NATO’s second-largest army
and
well-established military capabilities, as well as close links to the Middle East and the Caucasus. In this
regard, despite setbacks in Turkey-EU relations, Turkey remains a critically important ally of the EU and
the US. Around the time of the Kumport acquisition in 2015, Turkey’s navy traded port calls with the
Chinese navy, signifying Turkey’s commitment to deepen relations. Even so, there are at present no
IPOL | Policy Department for Structural and Cohesion Policies
38
reasons to believe that the Kumport Terminal would be mobilised for military purposes, although the
impact of such a development would be very serious.
2.5. Impact on EU of Chinese investments in European Neighbourhood
As the case of Turkey has shown, developments in the European Neighbourhood can be impactful for
the EU. Turkey is one of many countries in the Mediterranean to have received investments from China
in the maritime sector. In the Mediterranean, Chinese companies have invested in 18 ports.
20
To
provide a complete analysis of the risks that such investments bring to the EU is outside the scope of
this research. However, by looking at Chinese investments in the Bayport of Haifa in Israel, the following
section provides an example of how the risks may play out and impact the EU.
Bayport of Haifa, Israel
The most notable Chinese investments in the Mediterranean are the investment
by Shanghai
International Port Group (SIGP) in the Bayport of Haifa and that of CCCC in Ashdod port, both of which
are major port areas in Israel. As in European ports, the Chinese ZPMC is active in the Israeli Bayport of
Haifa and the Port of Ashdod. The EUR 1.5 bn investment in the Bayport of Haifa by SIPG allows it to
operate the wharf for 25 years from 2021. However, SIPG does not own the port but is leasing it from
Israel Ports Company. When the 25-year lease expires, SIPG will have to win a new bid to continue to
operate the port. The Bayport of Haifa should not be confused with the Port of Haifa portion recently
acquired by a consortium led by India's
Adani Group for about EUR 1.1bn. Both ports aim to make Haifa
the reference point for shipping in the region and transshipment to Europe.
A significant difference between the investment in the Bayport of Haifa and investments in European
ports lies in the operating system of the port. At the Bayport of Haifa, SIPG uses its own terminal
operating system (TOS), probably with an English interface as workers at the port are Israeli. Although
the specificities of the TOS used are unclear, it is reasonable to assume that SIPG has full access to data
related to the port operations and to their management. That data includes all the information on cargo
origin and destination, as well as content. Most European ports use Navis’s TOS
, an American leader in
the sector. The use of this or any other TOS from a trusted provider does not guarantee that Chinese
companies involved in the port will not access data – that depends on the shares acquired and the
agreement signed – but provides an extra layer of insurance that the Chinese company will not
automatically manage data.
The agreement with SIPG contains an essential requirement that in case of a conflict, it is obligated
under the contract to allow the security forces to enter the port area and even take over its operations.
Ensuring that maritime infrastructures can be retaken by the government and/or the state in case of
conflict with the country of a SOE invested in the port is something that should be taken on board by
Europeans too.
Unlike other countries in the Mediterranean region, Israel does not seem to be reconsidering its
decision to foster closer ties with China. If anything, the country is going in the opposite direction, with
negotiations for a free-trade agreement
.
Risks for Europe
Israel’s strengthening of relations with China seems to be following an established trajectory
that does
not appear to be coupled with a plan to distance itself from the US and the EU. Testament to this is
Israel’s adoption of FDI screening, which
the US had urged.
20
Data collected by MERICS. The ports are in Algeria, Egypt, Israel and Turkey, and, in EU countries, in France, Greece, Italy and Malta.
Chinese Investments in European Maritime Infrastructures
39
Any departure by Israel from its alignment with its Euro-Atlantic partners would seriously impact
Europe. However, regardless of any such move, SIPG’s operation of a port in Israel and its provision of
the TOS for the port increases the possibility of China redirecting shipping to the Bayport of Haifa.
Although the redirection of Mediterranean shipping to Haifa would substantially impact the EU, this
scenario is unlikely. Neither Israel nor the MENA region has the large and mature market the EU
provides. Hence, substantial redirection would amount to a heavy loss for China. It is assumed that in
such a scenario and to ‘punish’ Europe, transshipment from Israel to European ports would not occur
or would decrease, hurting China and Israel, which aims to become a Mediterranean maritime hub for
transshipment to Europe. Furthermore, depending on the companies that will ship to the Port of Haifa,
now owned by a consortium led by an Indian company, transshipment could occur via that port. The
main obstacle to alternative planning is COSCO’s shipping power.
Israel is an important security partner for the EU and there is a different likelihood of risk related to
cybersecurity in critical civilian and military port infrastructure in Haifa, where there are several military
bases. As data collection and management are carried out by SIPG and/or ZPMC and as data are
exchanged between port infrastructure, China could use the Bayport of Haifa as an entry point to
European port networks or to access sensitive European shipping data. China can use other existing
means that give it more direct access to the European port network – as previously presented – but
should the EU be able to secure those channels, Haifa would amount to a good option, especially if
Haifa were classified as a trusted port, as opposed to non-trusted Chinese ports.
2.6. Comparison of key regulations between the EU and US related to FDI
screening and maritime cabotage law
The EU and US have significantly different investment screening regimes. The EU’s Investment
Screening Mechanism has relatively limited scope, and is still building up a record of cases that build
precedents for future screening. It is only able to make non-binding recommendations to member-
states, which then need their own mechanism – if they have one - to block an investment along with
the will to use it. The US’ primary FDI management is through the Committee on Foreign Investment
in the United States (CFIUS) that brings together members representing
nine federal departments and
offices and which has an increasingly broad scope through a definition of national security that is
expanding in terms of how infrastructure and certain technologies are covered by the committee.
CFIUS decisions are binding and managed at the federal level, and there is a long history of cases going
back to 1988 that has established precedence, norms, and procedures that strengthen the legitimacy
of the committee. CFIUS also has detailed rules regarding foreign investors in American real estate that
is specific to geographic areas of national security concern within the US, which includes certain critical
infrastructure as well as military bases and key government offices.
Perhaps most importantly is that the EU regime is one where the decision is down to the member-
states despite them all being in a common market. When assessing whether or not a given investment
is of concern, member states are likely to consider that the investment may nevertheless enter the
common market and bring those risks anyway by going to another member state. In that case, the risk
still emerges, but the other member state gets the capital injection and other benefits. In comparison,
by federalizing the issue in the US under CFIUS, there is no ‘race to the bottom’ dynamic between states
which share a common market.
Furthermore, the EU and US have starkly different maritime cabotage law regimes. The
EU has no
common-market-level maritime cabotage law that governs the kinds of transportation services that
non-EU firms can provide within the common market. Instead, maritime cabotage is determined at the
member-state level, leading to patchwork regulations throughout the bloc. In comparison, the US has
IPOL | Policy Department for Structural and Cohesion Policies
40
an extremely limiting maritime cabotage law through the Merchant Marine Act of 1920 (better known
as the Jones Act). The US rules require that all transportation of goods or people between American
ports be done by US companies using US-owned and flagged ships that must have been built in
America, all crewed by US citizens or permanent residents. Vessels that fail to match that description
are only able to perform direct international trade – they bring goods into and out of a single US port
and then must head for a foreign port. They also cannot perform any kind of transshipping.
The Jones Act is generally regarded as a failure. Its stated intention was to preserve a strong merchant
marine and shipbuilding industry to be more resilient to global disruptions to shipping services (it was
made in response to World War One when foreign merchant marines were called up and the US was
left without a large enough shipping fleet to pick up the slack) and for the possible outbreak of future
wars. The domestic port-to-port shipping is extremely limited in the US despite being common
elsewhere, and high domestic maritime shipping costs have led rail and truck freight to be the best
option for many customers. The
US merchant marine has atrophied within its comprehensively
protected home market and there simply aren’t any major American shipping companies
internationally, and there are no state-owned shipping firms that could tolerate low profitability in
order to maintain shipping and broader logistics capacity.
Chinese Investments in European Maritime Infrastructures
41
3. CONCLUSION AND POLICY RECOMMENDATIONS
This study highlights the need for a holistic understanding of the opportunities and risks of Chinese
investment in European maritime transportation infrastructure, particularly concerning the EU as
a whole rather than with a focus exclusively on individual Member States.
Arguably, the benefits have been high in the case of investment in Piraeus, which has contributed
meaningfully to local development, employment, tax revenue, etc. Yet, at the EU level, the benefits are
less clear, as nearly all activity in Piraeus has either come from or is going to other EU ports; they are
simply transshipped through Piraeus when carried by COSCO vessels. A similar trend, on a smaller scale,
may emerge from COSCO’s acquisition in Hamburg – it may lead to greater flows to Hamburg if COSCO
uses it as a transshipping hub for the Baltic/North European region. However, unless the investments
unlock real and new demand for imports and exports to meet any new supply that COSCO brings, the
end result might be just redirecting of the existing demand from other European ports to Hamburg at
the cost of the former. It is unlikely to happen at scale in the short term, but if it does take place it could
be good for the city but would not create any positive net impact for the EU as a whole.
As such, there are limits to how valuable further investments into regional maritime infrastructure
could be without corresponding import and export demand increases. This was seen in China’s
investment in Kumport, which has stagnated in throughput and has seen little benefit from the
investment, while also being saddled with risks.
Risks from Chinese investment are apparent past certain thresholds of ownership levels, specifically in
terms of having influence over ports strategy and in terms of cyber/data risks if Chinese firms can access
IT systems and local networks. That presents a risk at the local level, but could also bring broader risks
for Europe, especially as it pertains to Member States’ militaries and to NATO.
However, some of the most significant risks emerge not only from the investment in the infrastructure
but in subsequent expansions of operations from COSCO. These include localised influence/coercion
risks, such as if COSCO threatened to divert its transshipping to other Mediterranean ports if Greece
took action that displeased Beijing. It also has a potential impact at the EU level, mainly through the
European Council, which on certain issues must vote unanimously. Similarly, although a source of
specific benefits, meaningful growth of COSCO operations also generates dependency risks for
Member States and the EU as the state-owned shipper seizes market share. The more market share that
COSCO wins in the European market, which is made easier due to COSCO’s
protected home market
advantage and its unfair vertically integrated value chain, the higher the dependency risk for shipping
services which underlie the entire system of global value chains.
None of this means that Chinese investment in European ports or participation in European shipping
markets represent unmitigable risks and must therefore be expelled from the common market. On the
contrary, many of the risks can be mitigated with better monitoring and regulation and better co-
ordination between the EU and Member States. However, the current regimes to manage such risks at
the EU and national level are insufficient for the challenges at hand and need to be reformed.
Finally, while this study provides a broad risk assessment framework, it has also revealed areas in need
of further study – particularly on measuring and managing cyber and data risks in greater detail, as well
as in developing and applying quantitative models to measure more precisely the impact that these
investments have on trade flows in terms of changes in volumes as well as changes in the share of trade
with specific partners.
IPOL | Policy Department for Structural and Cohesion Policies
42
Policy recommendations
Collect data and deepen understanding
• Commission further research to collect data on the risks of Chinese companies’
involvement in cyber and data security in critical infrastructures. The research should
clarify which are the Chinese companies involved, where Chinese software is used
either to collect or manage data and what are the risks both to trade flows and to
security of Chinese companies’ involvement. Such a study would provide a strong basis
to inform Member States and develop related policies.
• Commission further sustainable research to measure the specific impact on local and
EU-level trade flows from Chinese investment in European ports to more accurately
understand implications for total imports and exports and the effect on the share of
trade with China compared with other trade partners. Data to be collected should
include the impact on trade flows (size, location and whether preferential treatment is
grated to Chinese shipping companies) of Chinese companies involvement in
European ports, if any, and their characteristics.
Assess risks
• Encourage Member States to carry out a risk assessment of China’s involvement in their
maritime infrastructures that includes the impact on labour and the environment, as
well as on dependencies.
• Assess bottlenecks in the shipping of goods from China to Europe, considering
transshipment, and accordingly create redundancies and emergency plans to prepare
for a conflict (kinetic
21
or otherwise) with China.
Develop a European response
• Develop a proposal for a European maritime cabotage law. An EU solution already
exists for air and land, but not for the maritime sector. As such, EU solutions for air and
land provide the basis to adopt a pan-EU maritime cabotage law that could apply to
non-EU shippers.
• Increase the Europeanisation of screening of inbound investments. The
European Parliament should use the opportunity provided by the review of the
existing EU regulation on screening FDI
22
to propose a strengthening of the role of the
EU in not only screening but also blocking Chinese investments in critical
infrastructures. Maritime critical infrastructure is an area where the decision of one
Member State impacts all Member States, and it could be a pilot case to advance the
Europeanisation of FDI screening in critical infrastructures. This could be limited to
majority shareholding of Chinese enterprises, leaving decisions on minority
shareholdings in the hands of Member States.
• To mitigate cyber and data security risks, first publish guidelines on dealing with high-
risk actors, such as data-sharing best practices, then set up a regular (six-monthly and
then annual) review of progress with annexed transparency and reporting
requirements. The initial report should map existing European ports that use Chinese
21
A kinetic war is warfare that includes active warfare (i.e., lethal weapons used), non-kinetic warfare is information warfare, cyber-attacks
etc.
22
Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of
foreign direct investments into the Union.
Chinese Investments in European Maritime Infrastructures
43
software and/or data management platforms and the data being collected and
transmitted via these.
• Take the example of Israel and ensure that all Member States have laws to retake
control of ports/terminals and other maritime infrastructures ownership and/or
considered contingency plans in case that is required in a scenario of conflict (kinetic
or otherwise) with China, in co-ordination with EU and other Member States.
• Set up early warning systems for the risks that require monitoring according to the
methodology proposed in this study.
• Closely monitor all early warning signs of a potential major conflict in the Taiwan Strait,
the South China Sea or elsewhere.
• The Chinese system support for COSCO and CMG in building global market share
enhances their competitiveness vis-a-vis European shippers in the European market.
Advancing the building of system of EU investors that operate in the framework of
Global Gateway in the maritime sector (both at home and abroad) will help to level the
playing-field by creating new opportunities for European shippers to expand their
market share in developing countries.
• Effective cybersecurity mitigation strategies would require national-level action, first to
officially recognise port infrastructures as critical infrastructures and then to define who
would be responsible for what kind of cybersecurity risks. In addition, a mitigation
strategy would require co-ordination with Western partners regarding
counterintelligence. A capacity/risk management assessment is recommended if
government and/or the EU do not have such an overview.
IPOL | Policy Department for Structural and Cohesion Policies
44
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f8c6?version=1.0&t=1664279696380
Chinese Investments in European Maritime Infrastructures
47
ANNEX
Table 1: Value of acquisitions in the maritime infrastructure sector of EU and its
Neighbourhood by Chinese companies
Investor
Value,
EUR mln
Share
size
Transaction party
Country Source
2004
China Ocean Shipping
(COSCO) Pacific
133.6 25% Antwerp Port Belgium
https://www.truenumbers.it/cina-
porti-europa/
2007
China Ocean Shipping
(COSCO)
102.2 80% Burg Industries Netherlands China Global Investment Tracker
2008
China Ocean Shipping
(COSCO)
3,935.1 NA NA Greece China Global Investment Tracker
2010
Shanghai International Port
Group
NA 25% Zeebrugge Belgium
ECFR China-EU Power Audit Key
Deals 2005-2017
2012
China Ocean Shipping
(COSCO)
116.7 NA Piraeus Port Greece
ECFR China-EU Power Audit Key
Deals 2005-2017
2013
China Merchants
399.0
49%
CMA CGM
France
China Global Investment Tracker
2014
China National Building
Materials
97.8 NA NA Croatia
ECFR China-EU Power Audit Key
Deals 2005-2017
China Ocean Shipping
(COSCO)
25.0 24% Zeebrugge Belgium
https://www.truenumbers.it/cina-
porti-europa/
China Oil and Foodstuffs
Corporation COFCO
49.0 100%
Port of Constanta,
USA/USC Terminal
Romania
https://www.romaniajournal.ro/busi
ness/nidera-acquires-usausc-
terminal-in-the-port-of-constanta/
2015
China Merchants, China
Investment Corporation
(CIC), China Ocean
Shipping (COSCO)
829.0 65% Fina Liman Turkey China Global Investment Tracker
2016
China Ocean Shipping
(COSCO)
126.5 35%
Euromax Terminal
Rotterdam
Netherlands
ECFR China-EU Power Audit Key
Deals 2005-2017
China Ocean Shipping
(COSCO)
289.2 51% Piraeus Port Greece China Global Investment Tracker
China Ocean Shipping
(COSCO)
135.6 40% Maersk Italy China Global Investment Tracker
Qingdao Port International 15.1 9% NA Italy
https://www.truenumbers.it/cina-
porti-europa/
China Communications
Construction
99.4 NA Port de Riga Latvia
ECFR China-EU Power Audit Key
Deals 2005-2017
Genting 225.9 NA Nordic Yards Germany
ECFR China-EU Power Audit Key
Deals 2005-2017
China Ocean Shipping
(COSCO)
704.9 67% Piraeus Port Greece
ECFR China-EU Power Audit Key
Deals 2005-2017
ICBC NA NA Antwerp Port Belgium
ECFR China-EU Power Audit Key
Deals 2005-2017
2017
China Ocean Shipping
(COSCO)
203.5 51% Noatum Port Spain China Global Investment Tracker
China Ocean Shipping
(COSCO)
34.5 76% NA France
China Overseas Port Project Dataset
from 1979 to 2019
2019
China Ocean Shipping
(COSCO)
330.3 330.3 NA Greece China Global Investment Tracker
China Merchants
375.0
375.0
KLG Europe
Netherlands
China Global Investment Tracker
China Merchants
776.7
776.7
CMA CGM
France
China Global Investment Tracker
2021
China Ocean Shipping
(COSCO)
93.0 16% NA Greece China Global Investment Tracker
Sources: fDi Markets;
23
China Global Investment Tracker; ECFR China-EU Power Audit Key Deals 2005-2017; China Overseas
Port Project Dataset from 1979 to 2019, https://www.truenumbers.it/cina-porti-europa/,
https://www.romaniajournal.ro/business/nidera-acquires-usausc-terminal-in-the-port-of-constanta/ authors’ calculations.
23
fDi Markets, a Financial Times dataset on cross-border greenfield investments that covers all countries and sectors worldwide. It contains
information on various characteristics of the announced greenfield investment projects, such as sector of the mother company and
affiliate that is being created, value of investment projects, and estimate of the jobs being created.
IPOL | Policy Department for Structural and Cohesion Policies
48
Table 2: Pledged capital in announced greenfield investment projects in the maritime
sector infrastructure of the EU and its Neighbourhood; EUR m
Project date Parent company Destination country
Capital
investment
Jobs
created
May 2004 China Ocean Shipping Company (COSCO) Germany 13.8 80
Feb 2006 China Ocean Shipping Company (COSCO) Greece 9.6 10
Jun 2013 China Ocean Shipping Company (COSCO) Greece 218.6 3
Sep 2013 Brightasia Holding Germany 0.2 700
Jul 2016 China Ocean Shipping Company (COSCO) Greece 461.5 3
May 2018 Shanghai Lingang Economic Development Belgium 83.1 1255
May 2018 China Ocean Shipping Company (COSCO) Spain 38.5 135
Aug 2018 China Ocean Shipping Company (COSCO) Spain 23.3 102
Sep 2018 China Ocean Shipping Company (COSCO) Bosnia-Herzegovina 16.4 104
Dec 2018 China Ocean Shipping Company (COSCO) Turkey 21.3 12
May 2019 China Ocean Shipping Company (COSCO) Netherlands 13.8 100
Aug 2019 China Ocean Shipping Company (COSCO) Greece 185.5 65
Oct 2019 China Ocean Shipping Company (COSCO) Spain 41.0 507
Source: fDi Markets ; authors’ calculations.
Chinese Investments in European Maritime Infrastructures
49
Table 3: Mandatory Investments in the Port of Piraeus
No. Mandatory Enhancements (According to the 2016CA)
Reference cost (€)
Participation PPA (€)
1 Passenger terminal expansion (South zone – Phase A) 136,283,800.00
5,451,352.00
2
Repair of pavements, rails and RMG cranes of Pier I container
terminal
8,000,000.00
8,000,000.00
3 Conversion of pentagonal warehouse to passenger’s terminal 1,500,000.00
1,500,000.00
4
Underground tunnel for the connection of G2 car terminal to
the ex-ODDY area
5,000,000.00
5,000,000.00
5 Upgrade and maintenance of port infrastructure 15,000,000.00
15,000,000.00
6 Supply of equipment 25,000,000.00
25,000,000.00
7 Dredging of central port 8,000,000.00
8,000,000.00
8 Studies 5,000,000.00
5,000,000.00
9 Construction of new oil terminal 15,000,000.00
15,000,000.00
10 Expansion of Ro-Ro (car) terminal – Hrakleous pier 20,000,000.00
20,000,000.00
11 Upgrade of Perama Shipyards area (including floating docks) 55,000,000.00
55,000,000.00
Total of mandatory investments 293,783,800.00
162,951,352.00
Source: Piraeus Port Authority S.A. annual financial report 2020
Table 4: PPA/OLP Board of Directors
Name Function
YU ZengGang Chairman of the BoD, Executive Member of the BoD
ZHU Changyu Vice Chairman of the BoD, Non-Executive Member of the BoD
ZHANG Anming CEO, Executive Member of the BoD
LI Jin CFO, Executive Member of the BoD
KWONG Che Keung Gordon Independent Non-Executive Member of the BoD
ARVANTIS Nikolas Independent Non-Executive Member of the BoD
YU Tao Non-Executive Member of the BoD
POLITIS Dimitrios Non-Executive Member of the BoD
MORALIS Ioannis Non-Executive Member of the BoD
Source: https://www.olp.gr/en/about-us/corporate-governance/board-of-directors
IPOL | Policy Department for Structural and Cohesion Policies
50
Table 5: Gross throughput volume of Kumport Terminal
Year
Container throughput handled by Kumport
TEU ’000
% change
% share in Turkey
2015
1,170
-17.3
14.4
2016
655
-44.0
7.5
2017
1,063
62.3
10.6
2018
1,258
18.3
11.6
2019
1,281
1.8
11.1
2020
1,217
-5.0
10.5
2021
1,248
2.5
9.9
2022
1,209
-3.1
9.9
Sources: COSCO Shipping Ports Limited; Kumport; Port Operators Association of Turkey
Figure 7: Map of Piraeus Port
Source: PPA S.A. (2018). https://www.olp.gr/images/OLP_2018.pdf
PE 747.278
IP/B/TRAN/IC/2023-006
Print ISBN 978-92-848-1112-0 | doi:10.2861/66887 | QA-04-23-904-EN-C
PDF ISBN 978-92-848-1111-3 | doi:10.2861/506807 | QA-04-23-904-EN-N
This study looks at Chinese investments in maritime infrastructures through the
lens of ‘de-risking’ for the first time. It provides a comprehensive overview of
Chinese investments in the European maritime sector over the past two
decades and weighs the associated risks. The study borrows the framework
adopted by the National Risk Assessment of the Kingdom of the Netherlands 2022
for its risk assessment and further develops it to score the impact and likelihood
of the investments across five major threat areas: EU-level dependency risk,
individual dependency risk, coercion/influence risk, cyber/data risk and hard
security risk. The analysis illustrates that the risks remain insufficiently
understood by Member States, despite their high likelihood and/or impact. This
is particularly true for economic coercion and cyber/data security risks.