From the magazine – It took a while, but the European Parliament too has passed the stage of naivety. On 17 January, the European Parliament overwhelmingly adopted a resolution instructing the European Commission to develop a comprehensive European Ports Strategy. This should put an end to the selling off of European port infrastructure to foreign parties from countries that do not take human rights and respect for our European norms and values very seriously.
This article appeared (in Dutch) in SWZ|Maritime’s March 2024 port special and was written by editor-in-chief Antoon Oosting, swz.rotterdam@knvts.nl.
This important statement by the European Parliament (EP) is especially a success for Dutch CDA Member of European Parliament (MEP) Tom Berendsen, who acts as initiator and rapporteur on behalf of the EP. ‘We want the keys to the gates of Europe back,’ is a famous quote by Berendsen on his own website. ‘In more than 22 European ports, the Chinese already have a foothold through companies from China or Hong Kong to varying degrees. In the Greek port of Piraeus, it is even 100 per cent. In Hamburg, they acquired a 24.99 per cent stake in a major container terminal last year.’
‘According to the latest report by the The Hague Centre for Strategic Studies (HCSS), three quarters of container handling at the port of Rotterdam is already in Chinese hands. And at the Polish port of Gdynia, the Chinese control a key terminal that in September last year refused a US ship that wanted to unload military goods for the Polish and Ukrainian military. Gdynia is thus, alongside Zeebrugge and Eemshaven, an important gateway to Europe that the Americans use to land their troops and equipment in Europe. So by doing so, you give the Chinese control over our European defence,’ Berendsen says in an explanation of his report.
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Espionage and sabotage
Because that, then, is the big danger Berendsen warns against: The risks of espionage, sabotage and economic dependence through foreign interference in our ports. With their investments, the Chinese gain control over all major cargo flows entering and leaving Europe. ‘Our ports are public interest. We must stop Chinese interference in our critical European infrastructure. This report calls for taking back control and strengthening our market position,’ according to Berendsen.
As an example, he cites Russia’s power over Europe’s and especially Germany’s energy supply with the Nordstream gas pipelines. Berendsen: ‘When Russia began its invasion of Ukraine, the Russians turned off the gas tap under the guise of necessary maintenance to show how much they controlled the Europeans. So giving the Chinese control over our ports also gives them tools to sabotage our economy and military supplies.’
Economic power
Berendsen also warns of great economic dependence: ‘China has set out to overtake the US and become the world’s biggest economic power by 2049. The means to that end is the Belt and Road Initiative (BRI). Part of this includes developing the technology for digital logistics. This will give them control over our trade, technology and manufacturing industries. You can already see Chinese influence growing in our manufacturing industry. If you want to do something about this, you can only do it together as EU member states because nobody wants to lose their foreign investments to a competitor.’
The port strategy should explicitly focus on reducing foreign influence and strengthening safety, sustainability and competitiveness in European ports. For example, Berendsen argues that there should be an emergency button to expel a foreign power from the port if it deliberately sabotages infrastructure, and there should be more investment in energy infrastructure.
Also read: Optimism about decarbonisation under threat of a China-US war
Screening investments
The EU does already have a regulation for investments from outside the EU, the Foreign Direct Investments (FDI), but the screening mechanism included in it needs to be much stricter as far as Berendsen is concerned. This screening should be done by each individual EU member state, but he points out that far from every member state is convinced of its usefulness and necessity. Moreover, the mechanism stands or falls with how a member state introduces and applies it. The problem, according to Berendsen, is that for this, different countries’ interests are often far apart.
In the port of Rotterdam, for instance, Chinese interests in container handling in particular are very strong. Hong Kong-controlled Hutchison Port Holdings owns the largest Rotterdam container operator ECT with the Delta terminal and, in part, the Euromax terminal in which Chinese COSCO also has a 35 per cent stake. In addition, ECT has inland terminals in Venlo, Amsterdam and Moerdijk. China Merchant Port has a thirty per cent stake in the RWG terminal. Those interests are not so easy to disregard, let alone reduce. This is why Berendsen believes the EU and national governments should also have something to offer ports, such as competitive financing through the European Investment Bank (EIB) for energy transition investments. This is also included in the EP resolution.
EU port investment fund
Berendsen thinks politicians should learn from the past: ‘All the Chinese investments in European ports are not something that just happened to us, they are the result of political choices, especially since 2019. I think things really need to change and I say the same to banks that have largely withdrawn from the maritime sector and governments that have left ports to the market. We need to set up a joint European public-private investment fund in the maritime sector. Politicians and governments must recognise the strategic importance of the maritime sector. Due to market forces that have gone overboard, the public interest of our ports has not been sufficiently protected and that has to change.’
Due to market forces, ports are now competing for Chinese investments. ‘That is the result of perverse market forces that we need to remove. The same applies to drug smuggling. Ports are now competing on the fastest possible handling of cargo, which is at the expense of drug smuggling control. So we really should not do that. I don’t want ports to compete on that any longer,’ says Berendsen. That is why it is necessary to make joint European agreements on which foreign investments are and are not allowed.
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Chinese data collectors
And when it comes to security, as far as Berendsen is concerned, much more knowledge should also be shared about what technology you allow in ports. He feels, for instance, that Chinese customs scanners that collect data and can frustrate control processes are truly unthinkable. He adds that the same should apply to cranes that are connected via the internet to the Chinese manufacturer ZPMC, which has a global market share of eighty per cent in large container cranes.
Berendsen: ‘Data are incredibly important in logistics. We really can’t have Chinese companies gaining control over our trade flows via data collection in our ports. They develop their algorithms for logistics on the basis of this data, which we will soon no longer have any control over. That will lead to unfair Chinese competition for tenders and more, for example.’
Incidentally, he believes tax-funded tenders should also preferably be carried out by reliable European companies: ‘There are opportunities to keep out unreliable foreign companies and we should use them.’
Public tenders
Berendsen also believes that EU member state governments should be much more critical of Chinese bids for public tenders for dredging work in European ports, for example. In his view, the Foreign Subsidies Regulation (FSR) introduced by the European Commission in July 2023 is far too lax and should be tightened up considerably.
The FSR now stipulates that investments above EUR 500 million and bids in public tenders above EUR 250 million must be tested for unfair competition by, for example, extremely high state aid. But a lot of work for dredgers remains below that EUR 250 million threshold in terms of value, so Chinese companies often win European contracts anyway.
Picture: Tom Berendsen: ‘Giving the Chinese control of our ports therefore also gives them tools to sabotage our economy and military supplies’ (photo Sicco van Grieken).
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