Beijing has the ambitious foreign trade policy to lay its footprints throughout oceans and coastal areas worldwide.
U.S. experts recently sounded the alarm about the risks such ambitions posed to U.S. national security, at a congressional hearing.
The hearing scrutinized China’s Maritime Silk Road (MSR), the maritime component of China’s One Belt, One Road (OBOR) initiative, which Beijing rolled out in 2013. Beijing aims to establish geopolitical clout by financing infrastructure projects throughout Southeast Asia, Africa, Europe, and Latin America.
“Through MSR projects, China can advance both economic and non-economic objectives simultaneously. These projects act as ‘dual-use infrastructure,’ developments that serve both commercial and military purposes,” said U.S. Rep. Sean Patrick Maloney (D-N.Y.), chair of the Subcommittee on Coast Guard and Maritime Transportation, during his opening remarks at the hearing held on Oct. 17.
Maloney also said China has been building up its shipbuilding industry: five major Chinese shipping firms controlled 18 percent of the global volume of container shipping in 2015.
Meanwhile, Maloney said U.S. domestic commercial shipping capacity and the U.S. flag fleet in foreign trades have eroded to their lowest points since before World War II.
As a result, Maloney said, the U.S. military’s readiness and transport capacity have declined.
“In a world economy increasingly powered by maritime commerce and blue-water [ocean] presence, we cannot continue to allow the United States deep-water fleet to decay on our watch,” he said.
Meanwhile, China has sought to establish control over the world’s largest ports.
According to Jeffrey D. Becker, director of the Indo-Pacific Security Affairs program at the Virginia-based Center for Naval Analysis, Beijing has invested in and constructed 42 ports in 34 countries and regions through OBOR projects, citing comments made by Chinese ambassador to the UK Liu Xiaoming in Poland in 2018.
Meanwhile, Isaac B. Kardon, assistant professor at the U.S. Naval War College, estimated from his personal database that China’s state-owned enterprises “have equity and/or operating leases on upwards of 70 other key ports across the globe,” in addition to the ports in China. Thirteen Chinese ports are among the world’s largest.
The state-owned China Ocean Shipping Company (COSCO) alone has equity investments in 18 ports in 13 countries, including in the United States. Meanwhile, China Merchants Port Holdings, a subsidiary of the state-owned China Merchants Group, has investments in 23 ports in 16 countries.
Such investments also have security implications. “Chinese SOEs, like COSCO and China Merchants, are intimately tied to the Chinese state, and their positions as port operators could allow them to collect intelligence on the movement and location of USN [U.S. Navy] ships and other assets,” Becker stated at a June congressional hearing.
For example, Nihal Rodrigo, former Sri Lankan foreign secretary and ambassador to China, told The New York Times that during negotiations with Beijing over the construction of a port in Hambantota—an OBOR project—Chinese officials made it clear that “intelligence sharing was integral,” and that Sri Lanka was expected to tell Beijing who came and stopped at the port.
China Merchants Port Holdings is now running the Hambantota port on a 99-year lease, after Sri Lanka converted its owed loans of $1.4 billion into equity. Seizing the port has allowed Beijing to gain a key foothold in the Indian Ocean.
Becker also raised concerns about the Middle East, particularly the United Arab Emirates (UAE), where the U.S. Navy stations about 5,000 military personnel, some of them at the Fujairah Terminals.
Abu Dhabi (AD) Ports, a port authority in UAE that operates multiple port facilities, including Fujairah, inked a joint venture with COSCO Shipping Ports in 2018 to manage a terminal at the Khalifa Port.
Due to increased Chinese investment in the UAE, Becker said the Chinese regime could take advantage of “established connections between COSCO Shipping and UAE port authority personnel to obtain information on the movement of personnel, supplies, and material related to USN personnel stationed in the country.”
In addition, if Beijing were able to get its hands on U.S. Navy communication and other information through Chinese IT infrastructure, it would allow the Chinese military to learn from the U.S. Navy’s tactics and improve its operations.
China’s maritime presence also comes with the security concerns of using Chinese tech giant Huawei’s 5G telecommunication equipment.
Chad Sbragia, the U.S. deputy assistant secretary of defense for China, and Lieutenant General Giovanni Tuck of the U.S. Air Force stated that Huawei signed an agreement with China Merchants Port back in June to establish a lab in Shenzhen City to study how 5G can be used in port operations. The innovations could be later used in China Merchants-affiliated OBOR ports in foreign countries, according to their joint testimony before the October hearing.
“The presence of Huawei 5G equipment in Chinese-operated foreign ports would present new risks due to the inherent security vulnerabilities associated with Chinese telecom vendors,” they said.
They also warned that given Huawei products’ bad history of having security flaws, maritime infrastructure reliant on Chinese 5G services could be exploited by other hackers.
Huawei products are often favored by Chinese port operators. COSCO, the owner of Greece’s port of Piraeus, replaced the network infrastructure of the port’s data center with Huawei equipment, including routers and firewalls, after it gained control of the port in 2016, according to a June report by the National Review.
Currently, the U.S. administration has placed Huawei and more than 100 of its related entities on an “entity list,” banning them from doing business with U.S. firms unless they apply for a special license.
Sbragia and Tuck also noted that China’s control over major ports around the world would give the Chinese regime access to shipping data that could give them an unfair advantage over other countries, posing a threat “to the competitiveness of global markets and maritime economies.”