BY: SHIVALI PANDYA AND SIMONE TAGLIAPIETRA
The European Union is currently working on a novel framework for screening unusual straight investments (FDI). Maritime ports stand upwardly for the cornerstone of the European Union merchandise infrastructure, every bit 70% of goods crossing European borders move past times sea. This spider web log post service seeks to inform this fence past times looking at recent Chinese interest inwards European Union ports. In September 2017 Jean-Claude Juncker, president of the European Commission, proposed a novel European Union framework for screening unusual straight investments (FDI), disceptation that ‘if a foreign, state-owned, fellowship wants to buy a European harbour, business office of our unloosen energy infrastructure or a defense forcefulness technology firm, this should only hap inwards transparency, alongside scrutiny as well as debate’.
This proposal sparked a large debate inwards Europe over whether the European Union should induce got the ability to vet FDI as well as how this would run inwards practice.
Earlier this year, European leaders called on the Council as well as the European Parliament to brand farther progress on this topic. The Council accordingly agreed on June 13th 2018 to foremost negotiations alongside the European Parliament, inwards the promise of reaching an understanding earlier the adjacent elections.
In lite of these events, nosotros try to inform this fence past times looking at the figures of China’s interest inwards European Union maritime ports.
Maritime ports are a vital property for the competitiveness of the European economy. With over 70% of goods crossing European borders travelling past times sea, ports are indeed the gateway to the EU. European ports employ 1.5 meg people as well as currently grip €1,700 billion-worth of goods (Figure 1).
Figure 1 – Top x European ports past times container volume, 2016
Source: Bruegel.
EU ports induce got late caught the attending of diverse Chinese corporations, every bit China undertakes infrastructure projects some the the world every bit business office of its Belt as well as Road Initiative (BRI).
The BRI is an international infrastructure as well as merchandise evolution projection led past times the Chinese authorities inwards an endeavour to pursue greater cooperation as well as deeper integration of China into the the world economy. It is, inwards the simplest sense, a vision to carry on the ‘Silk Road spirit’ – “communication as well as cooperation betwixt the East as well as the West”.
The “Belt” includes overland shipping routes spanning Eurasia that connect China, Europe, Russia, as well as the Middle East. The “Road” refers to maritime routes starting inwards China that go on to Sri Lanka, Pakistan, the Middle East, eastern African states as well as eventually terminate inwards the Mediterranean Sea as well as northern European countries.
In 2016, the China Development Bank provided $12.6 billion inwards funding to BRI projects. China every bit good ready the Silk Road Fund alone to invest inwards BRI ventures.
In this context, over the in conclusion decade, mortal as well as state-owned Chinese firms induce got acquired stakes inwards 8 maritime ports inwards Belgium, France, Greece, Italy, the Netherlands, as well as Kingdom of Spain (Figure 2).
Figure 2 – The Belt as well as Road Initiative as well as Chinese stakes inwards go past times European ports
Source: Bruegel.
As the only multi-billion dollar port investment inwards the EU, the acquisition of a 35-year lease of Greece’s Piraeus Port past times the China Ocean Shipping Company (COSCO), for certain represents China’s flagship projection inwards this field.
In 2008, COSCO signed a bargain alongside the Piraeus Port Authority to operate 2 of the port’s iii terminals. In subsequent deals COSCO has since larn a bulk stakeholder inwards the Piraeus Port Authority, which operates the port’s 3rd terminal.
Since its acquisition past times COSCO, the port has experienced unprecedented growth due to novel technology as well as infrastructure upgrades. In vi years, port traffic grew past times over 300%. Under novel administration as well as alongside millions of euros spent to expand port capacity, COSCO aims to induce got Piraeus rank every bit i of the busiest ports inwards Europe.
This major investment reflects the fact that China considers the southern as well as eastern European regions every bit strategic. The Piraeus investment indeed extends beyond the maritime port itself, every bit China every bit good plans to produce the Land-Sea Express Route – a network of railroad connections from the port to the western Balkans as well as northern Europe.
In 2013 the Piraeus port was connected to the Greek railway system, but the electrical flow railway connections inwards the portion induce got fewer tracts, depression move speeds, as well as cannot adapt larger trains. China’s projection to institute novel railway lines connecting the Piraeus alongside the western Balkans as well as northern Europe could revolutionise European Union merchandise routes. Compared to existing shipping routes, which go some the Strait of Gibraltar, the Land-Sea Express Route could indeed decrease shipping fourth dimension betwixt China as well as the European Union past times 8-12 days.
These plans to increment rails connectivity induce got already attracted large companies to the Piraeus. Hewlett Packard (HP), Hyundai, as well as Sony induce got all decided to open logistics centres inwards the Piraeus as well as utilization the port every bit their primary distribution pump for shipments to eastern as well as fundamental Europe, every bit good every bit to northern Africa.
HP’s determination to shift operations from the port of Rotterdam inwards the Netherlands to the Piraeus indicates that, alongside expanded rails as well as freight connections, Piraeus could stand upwardly for a cheaper as well as to a greater extent than feasible selection compared to northern European ports.
Though the port of Rotterdam volition probable keep its primacy every bit the busiest port inwards Europe, the Piraeus port is laid to go along to come across an uptick inwards concern upon the completion of to a greater extent than BRI projects.
Hungary, Serbia, as well as China already signed a trilateral plan to produce a novel railway trouble betwixt Budapest as well as Belgrade, financed alongside loans from the Export-Import Bank of China. Construction has already begun inwards Serbia but remains stalled inwards Republic of Hungary due to an investigation past times the European Commission, since Republic of Hungary did non opened upwardly the projection upwardly to world tender until recently.
New cargo routes volition require novel storage as well as shipment centres as well as volition convey to a greater extent than concern to south-eastern Europe. The Land-Sea Express Route, inwards conjunction alongside other BRI projects, is so laid to heighten the purpose of southern as well as eastern European countries inwards the continental merchandise routes.
Notwithstanding these major developments, the European Union remains divided over its answer to the BRI. To date, only xi European Union Member States induce got officially joined the BRI project. Though nearly recognise the increasingly of import political as well as economical human relationship betwixt the European Union as well as China, at that spot are yet reservations over China’s motives behind the BRI as well as the acquit upon it would induce got on domestic markets.
For instance, despite stating his back upwardly for increased EU-China cooperation, France’s president Emmanuel Macron expressed his hesitations past times stating that the novel “roads cannot live on those of a novel hegemony” as well as “cannot live on one-way”. Germany’s chancellor Angela Merkel has taken a similar stance, pushing for reciprocity as well as stating her worry that economic relations volition live on linked alongside political questions.
Unlike French Republic as well as Germany, Hellenic Republic has warmly welcomed Chinese investment, alongside its prime number government minister Alexis Tsipras affirming Greece’s wishing to “serve every bit China’s gateway into Europe.” In 2017 Hellenic Republic blocked an European Union statement on Chinese human-rights violations, farther feeding into the fearfulness that the BRI could live on used past times China to exercise political leverage over involved countries.
China maintains closed ties inwards its 16+1 framework of cooperation alongside xvi fundamental as well as eastern European countries, all of which are either European Union Member States or official European Union candidate countries. The 16+1 setup has been perceived past times several European Union leaders every bit a Chinese endeavour to undermine European Union unity.
Maritime activities are already an of import element of China’s economy, as well as the province seeks to expand its international naval presence as well as operations past times creating partnerships alongside ports inwards which it has stakes. China every bit good aims to ensure access to critical infrastructure as well as resources it volition involve to displace economical growth.
Given their strategic relevance, nosotros consider that the Council as well as the European Parliament cannot avoid taking maritime activities into consideration during their discussions on the European Union framework for screening unusual straight investments.
The authors are grateful to Maria Demertzis as well as André Sapir for the useful comments received during the training of this note.
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