As NATO celebrated its 70th anniversary in Washington, one compelling security issue received insufficient attention: Chinese acquisitions of critical European infrastructure, especially ports.
Chinese state-controlled firms now hold stakes in more than a dozen European ports on the Mediterranean and the Atlantic, from Belgium to Spain to ownership of the legendary Greek port of Piraeus. Already, one-tenth of Europe’s container terminal capacity is under Chinese control.
Farther east on the Mediterranean, in Israel, a Chinese firm will soon start managing Haifa port, where U.S. naval ships have long made calls. Another Chinese firm won the contract to build a port in the south of Israel at Ashdod.
Beijing is now positioned in ports all around the eastern Mediterranean, including in Egypt’s Suez Canal region, where China is the largest investor.
Add to this that Russia is now well-established on the eastern Mediterranean coast with its expanding naval facility in Tartus, Syria. Russia and China conducted a joint naval exercise in the eastern Mediterranean in 2015.
So, is the Mediterranean, once the uncontested home base of the U.S. Sixth Fleet, on the way to becoming a China-dominated sea?
“The eastern Mediterranean is becoming somewhat contested,” says Erik Brattberg, head of the Europe program at the Carnegie Endowment. Russia and China are vying for influence. "The example of a close ally like Israel accepting and welcoming China investment can create complications that Europe should study.”
The U.S. military is certainly taking notice. Gen. Joseph Votel, head of U.S. Central Command, recently warned that China’s Belt and Road initiative — including port investments in the Arabian Gulf, Djibouti in East Africa, the Suez Canal, and the port of Haifa — could “mask longer-term military and political objectives."
Of course, China claims its infrastructure investments are purely economic, part of its new Silk Road strategy to facilitate commerce with Europe. Yet in Asia, where Beijing has also acquired a string of ports in strategic locations, the Chinese have revealed their intention to use some for military or political purposes.
Belatedly, European Union leaders are recognizing the long-term risks.
Last fall, the president of the European Commission, Jean-Claude Juncker, cautioned: “If a foreign, state-owned company wants to purchase a European harbor … this should only happen … with scrutiny and debate … so that we can protect our collective security if needed."
The EU is trying to find ways to screen foreign investments in strategically sensitive sectors. But with its huge purse, construction experience, and relatively cheap costs, China has found ready takers in Europe.
Washington also has urged Europe to limit Chinese inroads in strategic sectors, including telecoms, but has offered little incentive to wean struggling countries such as Greece from China’s economic temptations.
“It’s not enough for the U.S. to tell allies they can’t do business with China,“ says Brattberg. “This requires a level of statesmanship using economic incentives. Washington needs to provide alternatives for countries like Greece which need foreign investment.”
Not likely any time soon.
China’s move on Israel’s Haifa port shows how Beijing can make surprising inroads. Israel’s Transportation Ministry gave a state-run Chinese company a 25-year contract to run the port without involvement of its National Security Council, according to Haaretz.
Yet the port abuts the exit route from an adjacent navy base. (Israel’s nuclear-capable submarine fleet is stationed nearby.) U.S. naval ships call there. “The Chinese port operators will be able to monitor closely U.S. ship movements, be aware of maintenance activity, and could have access to equipment moving to and from repair sites,” said former U.S. chief of naval operations Gary Roughead at a conference in Haifa last year.
“Chinese investment is essential for our economy, but we have to limit it to things that will not affect our national interest or national security,” says retired Rear Adm. Shaul Horev, a former Israeli navy chief of staff and now director of the Research Center for Maritime Policy at the University of Haifa.
Yet the Haifa deal exemplifies how swiftly and strategically China’s Mediterranean plans are moving.
Meantime, NATO – designed to contain Russia — is still struggling to figure out how to deal with China, while EU members are split on the issue and American leadership is strikingly absent.
“What’s ironic,” says Brattberg, “is that a lot of U.S. concerns about China’s Belt and Road initiative and the lack of reciprocal access to markets are shared with European countries. China ought to be one issue where U.S./Europeans could work together. But that identity of views hasn’t translated into cooperation in dealing with Beijing.”