China’s Sea­port Diplo­macy: The­o­ries and Prac­tice


China Economist - - Contents -

Sun De­gang (孙德刚)

Mid­dle East Stud­ies In­sti­tute, Shang­hai In­ter­na­tional Stud­ies Univer­sity, Shang­hai, China

Ab­stract: China has de­vel­oped a new chain of com­mer­cial sea­ports along the Mar­itime Silk Road. These ports are un­like those used by over­seas mil­i­tary bases of the United States. While the for­mer fo­cuses on the eco­nomic de­vel­op­ment of China and other in­volved coun­tries through in­vest­ment, trade, in­fra­struc­ture con­struc­tion and in­ter­na­tional ship­ping cen­ter de­vel­op­ment, the lat­ter is at the ser­vice of the U.S. se­cu­rity strat­egy un­der­pinned by goals to strengthen al­liances, fight ter­ror­ism, ex­pand in­flu­ence and sup­port prox­ies. China has gained ex­ten­sive ex­pe­ri­ence from its sea­port re­form. Open­ing-up pro­grams like the “Shekou model” pro­mote busi­ness op­por­tu­ni­ties in ad­di­tion to the es­sen­tial ser­vices, and de­fine the port area as the “fron­tier”, the in­dus­trial park as the “mid­dle ground”, and the port city as the “back­yard”. Based on such ex­pe­ri­ence, China is ready to con­trib­ute to the de­vel­op­ment, peace and sta­bil­ity of emerg­ing coun­tries along the Mar­itime Silk Road and ex­plore sea­port diplo­macy with Chi­nese re­silience, dili­gence and fore­sight. China’s sea­port diplo­macy is mar­ket-ori­ented and in­volves com­pa­nies as key play­ers. It is also sup­ported by govern­ment co­or­di­na­tion. Sea­port diplo­macy has in­creased con­nec­tiv­ity and in­ter­de­pen­dence be­tween coun­tries and re­gions along the Mar­itime Silk Road, and helps avoid the “zero-sum game” and the “core-peripheral” asym­met­ri­cal re­la­tion­ship of de­pen­dence. China’s par­tic­i­pa­tion in the de­vel­op­ment of sea­ports along the Mar­itime Silk Road has fa­cil­i­tated the in­dus­tri­al­iza­tion process of the coun­tries in­volved and ben­e­fited lo­cal com­mu­ni­ties. This ap­proach stands in sharp con­trast to the mar­itime mil­i­ta­riza­tion and de­moc­ra­ti­za­tion pur­sued by some Western coun­tries. Nev­er­the­less, China’s par­tic­i­pa­tion in the de­vel­op­ment of sea­ports along the Mar­itime Silk Road also faces eco­nomic, le­gal, po­lit­i­cal, and se­cu­rity risks. Thus, cau­tion should be given to the ten­dency to politi­cize China’s sea­port de­vel­op­ment.

Key­words: sea­port diplo­macy, the Belt and Road Ini­tia­tive, the Mar­itime Silk Road, sea­port pol­i­tics, Chi­nese diplo­macy

JEL Clas­si­fi­ca­tion Codes: F15; F41; F55

DOI: 1 0.19602/j .chi­nae­conomist.2018.11.03

1. In­tro­duc­tion

With large land and mar­itime ter­ri­to­ries, China boasts ad­van­tages for in­ter­na­tional ex­changes over land and sea. In the Tang Dy­nasty (618–907), Quanzhou City of Fu­jian Prov­ince was the largest sea­port in the Ori­ent, through which ancient China en­gaged in trade with the Western world. Since 2010, China

has be­come the se­cond largest econ­omy in the world and a ma­jor trad­ing na­tion. It also trans­formed from a net cap­i­tal im­porter to a net cap­i­tal ex­porter with grow­ing in­dus­trial prow­ess. Projects like new and im­proved sea­ports, high­ways, bridges, nu­clear power plants, high-speed trains and the BeiDou Nav­i­ga­tion Satel­lite Sys­tem have be­come im­por­tant car­ri­ers for the ex­pan­sion of China’s over­seas in­ter­ests and en­riched China’s diplo­matic “tool­box” in the new era (Pan, 2017; Hu, 2015).

Par­tic­i­pa­tion in over­seas port de­vel­op­ment is an im­por­tant part of China’s de­vel­op­ment into a strong mar­itime na­tion. In July 2013, the Polit­buro of the Com­mu­nist Party of China (CPC) Cen­tral Com­mit­tee held its eighth col­lec­tive work­shop on China’s de­vel­op­ment as a mar­itime power. At the work­shop, General Sec­re­tary Xi Jin­ping said that “turn­ing China into a strong mar­itime na­tion is part of our so­cial­ist cause with Chi­nese char­ac­ter­is­tics”. Mar­itime strength and sea­port de­vel­op­ment have pro­pelled China’s Mar­itime Silk Road ini­tia­tive into in­ter­na­tional promi­nence. By the end of 2016, China had


in­vested in two thirds of the world’s top 50 con­tainer sea­ports. Chi­nese com­pa­nies have taken part in over­seas port op­er­a­tion projects in over 20 coun­tries in­clud­ing Malaysia, Sin­ga­pore, Brunei, Aus­tralia, Myan­mar, Sri Lanka, Pak­istan, United Arab Emi­rates, Kenya, Dji­bouti, Egypt, Is­rael, Tur­key, Greece, Morocco, Al­ge­ria, Nige­ria, Togo, An­gola, Spain, Italy, the Nether­lands and Bel­gium. As fore­run­ners of Chi­nese sea­port com­pa­nies, China Mer­chants Sea­port Hold­ings has made over­seas in­vest­ments worth more than 2 bil­lion U.S. dol­lars. It has in­vested in 49 sea­ports in 19 coun­tries and re­gions. COSCO Ship­ping Sea­ports Ltd. has in­vested in al­most 30 sea­ports world­wide, in­clud­ing 11 sea­ports in the


Belt and Road coun­tries and re­gions. In late Septem­ber 2018, a train loaded with auto parts and paper prod­ucts thun­dered out of a sta­tion in south­west China’s Chongqing Mu­nic­i­pal­ity. It was the 356th freight train since the launch of the China-Sin­ga­pore rail-sea tran­sit route on the same day a year ago,


which fur­ther con­nects 116 ports in 60 coun­tries and re­gions.

By sup­port­ing their sea­port de­vel­op­ment, China strives to sup­port the mod­ern­iza­tion and in­dus­tri­al­iza­tion of de­vel­op­ing coun­tries and pro­mote re­gional in­te­gra­tion un­der the Mar­itime Silk Road


ini­tia­tive. China’s busi­ness pres­ence in the Mar­itime Silk Road coun­tries through sea­port de­vel­op­ment stands in sharp con­trast with the mil­i­tary pres­ence of some Western pow­ers in the form of mil­i­tary bases, al­liances and in­ter­ven­tions. Sea­ports are key driv­ers of re­gional eco­nomic in­te­gra­tion un­der the Belt and Road Ini­tia­tive (Guan, 2015). The Mar­itime Silk Road is of great sig­nif­i­cance to the in­ter­na­tional


trans­porta­tion routes of en­ergy and in­dus­trial goods, as well as strate­gic mar­itime pas­sages. The Belt and Road Ini­tia­tive (BRI) aims to in­crease con­nec­tiv­ity among coun­tries in Europe, Asia and Africa, in which sea­ports play a linch­pin role. It rep­re­sents a new wave of glob­al­iza­tion spear­headed by de­vel­op­ing coun­tries.

Sea­port de­vel­op­ment is an im­por­tant part of China’s BRI, through which China en­gages in re­gional gover­nance and in­creases its over­seas eco­nomic pres­ence. How­ever, it is some­times de­mo­nized in the Western world as a “string of pearls” used to seek geopo­lit­i­cal in­ter­ests. In a re­port ti­tled “En­ergy Fu­tures in Asia: Fi­nal Re­port,” J.A. Mac­Don­ald and Hamil­ton Booz Allen coined the term “String of Pearls” list­ing the pearls as: (1) the Gwadar Sea­port of Pak­istan, (2) Chit­tagong Sea­port of Bangladesh, (3) Ham­ban­tota Sea­port of Sri Lanka, (4) a se­cret naval base in the Myan­mar, and (5) Kra Canal of Thai­land. The US Net As­sess­ment, Of­fice of the Sec­re­tary of De­fense (OSD/NA, 2005) spon­sored this re­port. It’s also in­di­cated that most of these pro­grams are closely re­lated to sea­port de­vel­op­ment with China’s par­tic­i­pa­tion along the Mar­itime Silk Road (Cao and Bi, 2016). In re­cent years, me­dia re­ports

in Ja­pan and In­dia have also ex­pressed con­cerns over the strate­gic in­tent of China’s de­vel­op­ment of sea­ports along the Mar­itime Silk Road. They crit­i­cized the lack of trans­parency in China’s sea­port in­vest­ment and in­creased debt bur­dens for lo­cal gov­ern­ments be­cause of China’s sea­port de­vel­op­ment. Those coun­tries, they ar­gued, were forced to eco­nom­i­cally rely on China. This re­liance was blamed on a new “core-peripheral” asym­met­ri­cal re­la­tion­ship of de­pen­dence with China. They con­tended that China’s par­tic­i­pa­tion in Sri Lanka’s in­fra­struc­ture de­vel­op­ment re­sulted in the coun­try’s in­debt­ed­ness to China of over 8 bil­lion US dol­lars, forc­ing Sri Lanka to trans­fer the Ham­ban­tota Sea­port to a Chi­nese com­pany on a 99-year lease. A news story in the Ja­pan Times stated that China prac­ticed the so-called


“cred­i­tor im­pe­ri­al­ism” in its over­seas sea­port de­vel­op­ment.

The ques­tion fac­ing China is how to dis­pel doubts from the Western world and the in­ter­na­tional com­mu­nity about China’s cre­ation of the so- called “string of pearls” and pur­suit of “cred­i­tor im­pe­ri­al­ism” and its own ver­sion of the “Mon­roe doc­trine”? How can China strike a del­i­cate bal­ance be­tween its tra­di­tional de­fen­sive for­eign pol­icy prin­ci­ple and the need to ac­tively pro­tect its over­seas in­ter­ests and pro­mote mu­tu­ally ben­e­fi­cial de­vel­op­ment? An­swer­ing these ques­tions is, with­out doubt, of great aca­demic value and prac­ti­cal rel­e­vance.

2. Sea­port Diplo­macy with Chi­nese Char­ac­ter­is­tics: Im­pli­ca­tions and Par­a­digm

Sea­port diplo­macy with Chi­nese char­ac­ter­is­tics is rooted in the rich ex­pe­ri­ence of Chi­nese com­pa­nies in over­seas port de­vel­op­ment. It is closely re­lated to China’s diplo­matic de­ci­sion-mak­ing mech­a­nism, dom­i­nant state-owned sea­port en­ter­prises and in­dus­trial strength. With the deep­en­ing par­tic­i­pa­tion of Chi­nese com­pa­nies in the de­vel­op­ment of sea­ports along the Mar­itime Silk Road, China’s sea­port diplo­macy in­creas­ingly comes to light. Through in­fra­struc­ture de­vel­op­ment of rail­ways, roads, bridges and sea­ports, China is shap­ing its sea­port diplo­macy with the Mar­itime Silk Road coun­tries through land and sea, con­nect­ing ad­vanced economies with de­vel­op­ing economies and in­te­grat­ing a se­cu­rity agenda with the de­vel­op­ment agenda.

China’s sea­port diplo­macy hereby refers to the sum of con­cepts, mech­a­nisms and poli­cies for China to strate­gi­cally con­nect with tar­get coun­tries, lever­age each party’s ad­van­tages in sea­port de­vel­op­ment, and en­sure that Chi­nese com­pa­nies serve China’s strate­gic diplo­matic ob­jec­tives in par­tic­i­pat­ing in over­seas port de­vel­op­ment through govern­ment co­or­di­na­tion, so as to sat­isfy cor­po­rate in­ter­ests and the de­vel­op­ment needs of tar­get coun­tries. The par­a­digm of China’s sea­port diplo­macy is four­fold: (1) govern­ment-en­ter­prise co­or­di­na­tion, (2) co­or­di­na­tion be­tween govern­ment min­istries, (3) mu­tual sup­port be­tween cen­tral and lo­cal gov­ern­ments, and (4) win-win co­op­er­a­tion be­tween China and tar­get coun­tries.

2.1 Govern­ment-En­ter­prise Re­la­tion­ship

On the one hand, sea­port com­pa­nies have be­come im­por­tant en­ti­ties for the im­ple­men­ta­tion of China’s co­op­er­a­tion with the Mar­itime Silk Road coun­tries, and have en­riched the “tool­box” of China’s diplo­macy in the new era. On the other hand, var­i­ous Chi­nese min­istries in­clud­ing the Min­istry of For­eign Af­fairs have worked to cre­ate a fa­vor­able po­lit­i­cal and diplo­matic en­vi­ron­ment for in­ter­gov­ern­men­tal co­op­er­a­tion. They have be­come spokesper­sons for Chi­nese sea­port en­ter­prises in ex­pand­ing over­seas in­ter­ests and par­tic­i­pat­ing in over­seas port de­vel­op­ments. The Min­istry of For­eign Af­fairs has pro­vided pol­icy, fi­nanc­ing and diplo­matic as­sur­ances for China com­pa­nies in their over­seas op­er­a­tions, cap­i­tal ex­port and in­dus­trial re­lo­ca­tions. Un­der govern­ment-en­ter­prise co­or­di­na­tion, sea­port diplo­macy rep­re­sents mu­tual means and end prod­ucts or de­liv­er­ables of the govern­ment and en­ter­prises.

China’s sea­port diplo­macy has been ac­com­pa­nied by fre­quent govern­ment-en­ter­prise co­or­di­na­tion and changes in China’s sea­port man­age­ment sys­tem. Over half a cen­tury after the found­ing of the Peo­ple’s Repub­lic of China in 1949, all sea­ports in China were un­der the man­age­ment of the de­part­ment in charge of trans­porta­tion un­der the State Coun­cil. This cen­tral-com­mand sys­tem led to a lack of self­ini­tia­tive of sea­ports and par­tic­u­larly lo­cal gov­ern­ments and en­ter­prises. After the dawn of the 21st cen­tury, the highly cen­tral­ized sea­port man­age­ment model started to change. China’s cen­tral govern­ment de­volved the power of sea­port man­age­ment to cities, and es­tab­lished a three-tier man­age­ment sys­tem in­volv­ing cen­tral and lo­cal gov­ern­ments and en­ter­prises. This new man­age­ment model in­creased sea­port-in­dus­try in­ter­ac­tions (Zhao et al., 2016). In Jan­uary 2004, the Port Law of the Peo­ple’s Repub­lic of China came into ef­fect and was re­vised in 2015. The law pro­vides le­gal as­sur­ance for the joint par­tic­i­pa­tion of gov­ern­ments and en­ter­prises in sea­port de­vel­op­ment. This rep­re­sents the “go­ing global” ini­tia­tive of sea­port en­ter­prises and diplo­macy through sea­port de­vel­op­ment.

2.2 Re­la­tion­ship of Govern­ment Min­istries

Un­der the Belt and Road frame­work, var­i­ous min­istries of China’s cen­tral govern­ment have spe­cific tasks and co­or­di­nate with each other in as­sist­ing Chi­nese com­pa­nies in de­vel­op­ing over­seas sea­ports. These min­istries in­clude the Na­tional De­vel­op­ment and Re­form Com­mis­sion (NDRC), the Min­istry of For­eign Af­fairs, the Min­istry of Com­merce and the Min­istry of Trans­porta­tion. After the dawn of the 21st cen­tury, the top-level de­sign of China’s sea­port diplo­macy has be­come in­creas­ingly so­phis­ti­cated. The Out­line of the 12th Five-Year Plan for Na­tional Eco­nomic and So­cial De­vel­op­ment (2011-2015) en­acted by the State Coun­cil in 2011 has made over­all plan­ning for the de­vel­op­ment of sea­ports and es­pe­cially do­mes­tic sea­ports. The Out­line calls for “mod­ern­iz­ing coastal sea­port clus­ters” and “deep­en­ing


sea­port coast­line re­source in­te­gra­tion and op­ti­miz­ing sea­port lay­out.” In Novem­ber 2012, then Pres­i­dent Hu Jin­tao noted that “we should in­crease our strate­gic ca­pa­bil­i­ties to main­tain our mar­itime se­cu­rity, de­fend our na­tional mar­itime sovereignty and mar­itime rights, and pro­tect our de­vel­op­ing mar­itime in­dus­try, mar­itime trans­porta­tion and en­ergy re­source strat­egy” (Liang, 2011). In July 2013, Pres­i­dent Xi Jin­ping re­marked that:

“China is a large coun­try in terms of its land mass and mar­itime ter­ri­to­ries and has broad mar­itime strate­gic in­ter­ests... We should, based on the over­all de­vel­op­ment of so­cial­ism with Chi­nese char­ac­ter­is­tics, co­or­di­nate do­mes­tic and in­ter­na­tional pri­or­i­ties, at­tach equal im­por­tance to land and mar­itime de­vel­op­ment, fol­low a path of co­op­er­a­tion for win-win re­sults to build a pros­per­ous and strong coun­try through mar­itime de­vel­op­ment, and make solid progress in de­vel­op­ing a strong mar­itime na­tion


through peace, de­vel­op­ment and win-win co­op­er­a­tion.”

Al­though the Out­line of the 13th Five-Year Plan for Na­tional Eco­nomic and So­cial De­vel­op­ment (2016-2020) does not specif­i­cally ad­dress China’s par­tic­i­pa­tion in over­seas port de­vel­op­ment, it calls for ad­vanc­ing the Belt and Road de­vel­op­ment, and pro­mot­ing com­pre­hen­sive east­ward and west­ward open­ness through land and sea. It also puts a pre­mium on in­fra­struc­ture con­nec­tiv­ity and in­ter­na­tional


cor­ri­dor de­vel­op­ment for eco­nomic co­op­er­a­tion. Such doc­u­ments en­acted by China have be­come guidelines on sea­port co­op­er­a­tion for var­i­ous min­istries.

The Min­istry of For­eign Af­fairs, the Min­istry of Trans­porta­tion and the Min­istry of Com­merce co­or­di­nate with each other un­der the Belt and Road Ini­tia­tive. In Oc­to­ber 2014, the Deputy Di­rec­tor­Gen­eral of the De­part­ment of In­ter­na­tional Co­op­er­a­tion of the Min­istry of Trans­porta­tion Ren Weimin

re­marked at the Fo­rum for In­ter­na­tional Co­op­er­a­tion of the 21st Cen­tury Mar­itime Silk Road & the Fourth In­ter­na­tional Fo­rum on Port Chain Strat­egy in Shen­zhen that sea­port in­vest­ment, con­struc­tion, op­er­a­tion and co­op­er­a­tion in the Belt and Road coun­tries and re­gions rep­re­sent an im­por­tant di­rec­tion for the fu­ture de­vel­op­ment of the 21st Cen­tury Mar­itime Silk Road. In ad­di­tion to pro­vid­ing as­sis­tance for sea­port con­struc­tion in coun­tries like Pak­istan and Sri Lanka, China’s sea­port diplo­macy also in­cludes other meth­ods of par­tic­i­pa­tion such as con­struc­tion of over­seas port projects and ac­qui­si­tion of

10 sea­port op­er­a­tion rights.

The NDRC, the Min­istry of For­eign Af­fairs and the Min­istry of Com­merce also take an ac­tive part in such co­or­di­na­tion. In March 2015, they jointly re­leased the Vi­sions and Ac­tions for the Joint De­vel­op­ment of the Silk Road Eco­nomic Belt and the 21st Cen­tury Mar­itime Silk Road (“Vi­sions and Ac­tions”), which high­lights the im­por­tance of sea­ports in de­vel­op­ing the Mar­itime Silk Road. It states that “a smooth, se­cure and ef­fi­cient route of trans­porta­tion should be built through cen­tral cities along in­ter­na­tional pas­sages at land..., and key sea­ports at sea... We should pro­mote sea­port in­fra­struc­ture de­vel­op­ment, land-mar­itime con­nected trans­porta­tion and co­op­er­a­tive sea­port de­vel­op­ment, in­crease sea 11 routes and mar­itime trans­porta­tion, and en­hance in­for­ma­tion-based mar­itime lo­gis­ti­cal co­op­er­a­tion.”

2.3 Re­la­tion­ship be­tween Cen­tral and Lo­cal Gov­ern­ments

China is a large coun­try in terms of its land mass and mar­itime ter­ri­to­ries. The level of eco­nomic de­vel­op­ment is un­even be­tween its coastal re­gions in the east and in­te­rior prov­inces in the west. The Chi­nese govern­ment has worked hard to cre­ate fa­vor­able con­di­tions of open­ness for prov­inces in the north­west, north­east and south­west. Par­tic­i­pa­tion in over­seas port de­vel­op­ment is not only ben­e­fi­cial to tar­get coun­tries, but also cre­ates op­por­tu­ni­ties for the eco­nomic de­vel­op­ment of China’s in­te­rior prov­inces. In this sense, over­seas port de­vel­op­ment is an ex­am­ple of how cross-bor­der and cross-re­gional co­op­er­a­tion leads to win-win re­sults for both sides. China’s in­te­rior prov­inces re­spond to na­tional de­vel­op­ment strat­egy and im­ple­ment na­tional plans through con­nec­tiv­ity and eco­nomic in­te­gra­tion with coastal re­gions both at home and abroad.

China’s cen­tral and lo­cal gov­ern­ments share con­sis­tent in­ter­ests when it comes to par­tic­i­pa­tion in over­seas port de­vel­op­ment and sup­port­ing the eco­nomic de­vel­op­ment of in­te­rior prov­inces. In the in­te­rior re­gions, China’s par­tic­i­pa­tion in the de­vel­op­ment of the Gwadar Port con­nects coastal coun­tries in West Asia and South Asia with landlocked re­gions like China’s Xin­jiang Uygur Au­ton­o­mous Re­gion, Afghanistan and Cen­tral Asia. China’s con­struc­tion of the Kyaukpyu Port pro­vides its Yun­nan Prov­ince and Myan­mar’s in­te­rior re­gions with ac­cess to the In­dian Ocean. This route greatly short­ens the dis­tance of trans­porta­tion and in­creases con­nec­tiv­ity. the Demo­cratic Peo­ple’s Repub­lic of Korea’s leas­ing of the Ra­son Port to China pro­vides Chi­nese firms from the north­east, In­ner Mon­go­lia and even Mon­go­lia with ac­cess to the sea. In coastal re­gions, sea­ports have be­come im­por­tant car­ri­ers for China’s diplo­macy in the new era. Cre­at­ing “friendly ports” has be­come an im­por­tant way for China’s port cities to par­tic­i­pate in the Mar­itime Silk Road ini­tia­tive. In 2015, the Chi­nese govern­ment an­nounced 15 pri­or­ity sea­ports in China, in­clud­ing (from north to south): Dalian, Tian­jin, Yan­tai, Qing­dao, Shang­hai, Ningbo, Fuzhou, Quanzhou, Xi­a­men, Shan­tou, Guangzhou, Shen­zhen, Zhan­jiang, Haikou and Sanya. 12Many sea­port com­pa­nies in­clud­ing Shang­hai Port, Qing­dao Port, Shen­zhen Port and Lianyun­gang Port have proac­tively en­gaged in co­op­er­a­tion in the form of friendly ports and joint op­er­a­tions. They have held

port fo­rums and cre­ated port al­liances, and be­come im­por­tant par­tic­i­pants in China’s over­seas sea­port de­vel­op­ment and op­er­a­tion, thereby ful­fill­ing “sea­port diplo­macy” ob­jec­tives for all na­tions in­volved. For in­stance, Qing­dao en­tered into friendly port re­la­tions with 16 over­seas sea­ports, which is an ex­em­plary ex­am­ple of its sup­port for sea­port diplo­macy.

2.4 China’s Re­la­tions with Tar­get Coun­tries

There are con­sid­er­able dif­fer­ences be­tween China and the Mar­itime Silk Road coun­tries in terms of po­lit­i­cal sys­tems, ide­olo­gies, cul­tural tra­di­tions, eco­nomic mod­els and mid- and long-term de­vel­op­ment strate­gies. How­ever, both China and tar­get coun­tries wish to build ma­jor in­fra­struc­tures like sea­ports, in­crease em­ploy­ment, and de­velop coastal and in­land re­gions for the bet­ter­ment of peo­ple’s life. Sea­port diplo­macy and Chi­nese com­pa­nies’ par­tic­i­pa­tion in the con­struc­tion of sea­ports along the Mar­itime Silk Road are at­tempts to repli­cate the suc­cess of China’s “Shekou Model” in the 1980s. This model fea­tures in­te­grated de­vel­op­ment of the fron­tier sea­port area, the mid­dle ground in­dus­trial zone and the city as the “back­yard”. In terms of in­fra­struc­ture en­vi­ron­ment, it aims to cre­ate world-class port fa­cil­i­ties and smooth trans­porta­tion and dis­tri­bu­tion chan­nels be­tween each port and the hin­ter­land, de­velop in­dus­trial zones, lo­gis­ti­cal parks and free-trade zones, and con­struct com­mer­cial and res­i­den­tial fa­cil­i­ties nec­es­sary for in­dus­trial de­vel­op­ment. In terms of in­sti­tu­tional en­vi­ron­ment, cus­toms clear­ance, set­tle­ment and

13 pay­ment, as well as lo­gis­ti­cal and train­ing ser­vices are pro­vided.

As a par­tic­i­pant in the de­vel­op­ment of Mar­itime Silk Road coun­tries, China be­lieves in the ben­e­fits of port de­vel­op­ment for the peo­ple. In­fra­struc­ture con­struc­tion will pro­mote lo­cal em­ploy­ment and so­cio-eco­nomic de­vel­op­ment, al­le­vi­ate so­cial con­tra­dic­tions, and main­tain po­lit­i­cal sta­bil­ity.

3. Ad­van­tages and In­flu­ences of China’s Sea­port Diplo­macy

The re­cent his­tory of China’s sea­port de­vel­op­ment can be di­vided into two stages. In the first stage (1949-1999), China in­tro­duced ad­vanced for­eign tech­nol­ogy to build its own sea­ports. In the se­cond stage (2000-present), as Chi­nese sea­port com­pa­nies had gained knowl­edge and ex­pe­ri­ence, they started to con­struct sea­ports in for­eign coun­tries, thus un­veil­ing China’s sea­port diplo­macy.

Since the be­gin­ning of the 21st cen­tury, China has been up­grad­ing its sea­port in­dus­try. With grow­ing tech­nol­ogy and cap­i­tal, Chi­nese port en­ter­prises started to par­tic­i­pate in the sea­port de­vel­op­ment of both de­vel­op­ing and de­vel­oped coun­tries, ex­plor­ing a new par­a­digm of sea­port diplo­macy.

China en­joys unique ad­van­tages in sea­port diplo­macy. First, China boasts su­pe­rior sea­port con­struc­tion ca­pa­bil­i­ties. China leads the world in terms of the ship­build­ing in­dus­try. Since 2013, China has been the world’s largest cargo trad­ing coun­try. It ranked the first in the world for 10 con­sec­u­tive years in terms of port cargo through­put and con­tainer through­put. Among the world’s top 20 sea­ports based on cargo through­put, 13 are from the Chi­nese main­land. Among the world’s top 20 sea­ports based

14 on con­tainer through­put, eight are from the Chi­nese main­land. In 2014, China’s ex­ports reached 2.35 tril­lion US dol­lars, 80% of which were trans­ported by sea (Eran, 2016). There­fore, sea­ports are es­sen­tial to China’s mar­itime trade. By the end of 2016, there were 2,317 10,000-ton berths in China. The fourth phase of the Yang­shan deep-wa­ter port in Shang­hai, which is the most so­phis­ti­cated au­to­mated ter­mi­nal in the world, was put into op­er­a­tion by the end of 2017. China has suc­ces­sively put into op­er­a­tion a 400,000-ton min­eral ore ter­mi­nal at Qing­dao Port, a 450,000-ton crude oil ter­mi­nal at Zhoushan Ter­mi­nal in Ningbo, the fourth phase of the Nan­sha con­tainer ter­mi­nal at Guangzhou Port, and a wa­ter,

rail­way and road com­bined trans­port hub with 16 berths each han­dling 5,000 tons, rep­re­sent­ing a ma­jor


ad­vance­ment in lo­gis­tics at the Guoyuan Port in Chongqing, to name a few. China has 34 100-mil­lion­ton ports. Con­sid­er­ing the world’s top 10 sea­ports by cargo through­put and con­tainer through­put, seven are from China.

China’s su­pe­rior ca­pac­ity for port con­struc­tion has be­come ma­te­ri­al­ized into im­por­tant pro­duc­tiv­ity un­der the Mar­itime Silk Road ini­tia­tive. It took cen­turies for the Port of Colombo in Sri Lanka to reach to­day’s through­put. After China’s par­tic­i­pa­tion in the con­struc­tion of the Port of Colombo, its port through­put dou­bled in a short span of 30 months, giv­ing it the po­ten­tial to be­come one of the world’s top city ports in the fu­ture. COSCO Group par­tic­i­pated in the con­struc­tion of the Port of Pi­raeus in Greece, which is of great im­por­tance to in­creases con­nec­tiv­ity with coun­tries in Cen­tral and Eastern Europe. This pro­ject fa­cil­i­tated the Greek port’s de­vel­op­ment into a ship­ping hub, and in­creased in­vest­ment and em­ploy­ment in this debt-rid­den coun­try thereby help­ing to al­le­vi­ate its eco­nomic cri­sis with huge


Chi­nese in­vest­ment.

Se­cond, there are nu­mer­ous nat­u­ral un­frozen ports, deep-wa­ter ports and strate­gic depths at land along the Mar­itime Silk Road with great port de­vel­op­ment po­ten­tials. Since 2002, China has par­tic­i­pated in over 20 over­seas port projects, in­clud­ing three in 2013 and five in 2014.17 Ac­cord­ing to the Fi­nan­cial Times, China has in­vested in 20% of the world’s top 50 ports in 2010. By 2015, China had in­vested in


67% of the world’s top 50 ports. This shows that China’s port con­struc­tion and op­er­a­tion ca­pa­bil­i­ties are in­creas­ingly rec­og­nized by other coun­tries around the world. Most coun­tries along the Belt and Road routes are emerg­ing economies and de­vel­op­ing coun­tries, with a to­tal pop­u­la­tion of about 4.4 bil­lion and eco­nomic ag­gre­gate at about 21 tril­lion US dol­lars, ac­count­ing for 63% and 29% of world to­tal,


re­spec­tively. Most of such coun­tries are eco­nom­i­cally less de­vel­oped with good nat­u­ral har­bors and port de­vel­op­ment re­sources. For in­stance, in­fra­struc­ture con­struc­tion con­trib­uted to over 50% of the GDP for the African con­ti­nent in re­cent years, but there was a short­age of cap­i­tal of at least 93 bil­lion US dol­lars each year. At­tract­ing for­eign cap­i­tal to port in­fra­struc­ture con­struc­tion in the Silk Road coun­tries is of great sig­nif­i­cance to their eco­nomic take­off and so­cial sta­bil­ity (Foster and Gar­men­dia, 2010).

Par­tic­i­pa­tion in over­seas com­mer­cial port de­vel­op­ment helps China ex­pand its eco­nomic pres­ence and paves the way for the im­ple­men­ta­tion of the Belt and Road Ini­tia­tive and the im­prove­ment of China’s ma­jor-coun­try sta­tus. Par­tic­i­pa­tion of Chi­nese en­ter­prises in over­seas port con­struc­tion is highly con­sis­tent with China’s diplo­matic goal to “build an in­ter­con­nected world”.

Par­tic­i­pa­tion in port de­vel­op­ment along the Mar­itime Silk Road has also en­riched the the­ory of China’s sea­port diplo­macy, and formed in­ter­de­pen­dence be­tween the govern­ment and en­ter­prises, be­tween the Min­istry of For­eign Af­fairs and other min­istries, be­tween cen­tral and lo­cal gov­ern­ments and be­tween China and the Mar­itime Belt and Road coun­tries. Such in­ter­de­pen­dence is dif­fer­ent from an an­tag­o­nis­tic re­la­tion­ships of zero-sum game or the “win­ner takes all” model (Su, 2016). China par­tic­i­pated in the con­struc­tion of a new port in North Abaco of the Ba­hamas, the Port of Pi­raeus in Greece, the Port of Dar­win in Aus­tralia, the Mom­basa Port in Kenya, the Ham­ban­tota Port in Sri Lanka, the Gwadar Port in Pak­istan and Chit­tagong Port in Bangladesh, which are all lo­cated at in­ter­na­tional ship­ping ter­mi­nals and help im­prove in­fra­struc­ture con­struc­tion and peo­ple’s wel­fare in these coun­tries.

There are two strings along the Mar­itime Silk Road from South­east Asia to the South Pa­cific

Ocean, the In­dian Ocean, the Red Sea, the Mediter­ranean and the At­lantic Ocean. The first is a string of mil­i­tary bases deployed by the United States over se­cu­rity in­ter­ests; and the se­cond is a string of com­mer­cial sea­ports con­structed and op­er­ated with China’s par­tic­i­pa­tion that aim to pro­mote eco­nomic in­ter­ests and seek in­clu­sive de­vel­op­ment. Over 10 Chi­nese en­ter­prises have par­tic­i­pated in con­struc­tion and op­er­a­tion in more than 20 coun­tries, in­clud­ing COSCO Ship­ping Ports, China Har­bor En­gi­neer­ing Com­pany Ltd. (CHEC), China Mer­chants Port Hold­ings Co., Ltd., China Com­mu­ni­ca­tions Con­struc­tion Co., Ltd. (“CCCC”), Chi­nese Over­seas Port Hold­ings Ltd., China Road & Bridge Cor­po­ra­tion (CRBC), Shan­dong Land­bridge Group and Shang­hai In­ter­na­tional Port (Group) Co., Ltd. They have be­come an im­por­tant ful­crum in China’s de­vel­op­ment of a blue ocean eco­nomic belt and pro­mo­tion of in­fra­struc­ture in­ter­con­nec­tiv­ity among the Mar­itime Silk Road coun­tries. Ac­cord­ing to a re­port of Grisons Peak In­vest­ment Bank head­quar­tered in Lon­don, from June 2016 to June 2017, Chi­nese com­pa­nies an­nounced nine over­seas port ac­qui­si­tion or in­vest­ment plans with a to­tal value of rel­e­vant projects reach­ing 20.1 bil­lion US dol­lars. This amount more than dou­bled the to­tal value of 9.97 bil­lion US dol­lars in­vested by

20 Chi­nese com­pa­nies in Chi­nese over­seas port projects dur­ing the same pe­riod of the pre­vi­ous year.

After years of im­ple­men­ta­tion, the “peo­ple’s liveli­hood” and “con­nec­tiv­ity” con­cepts in China’s sea­port diplo­macy have be­come well- re­ceived by the Mar­itime Silk Road coun­tries. The Port of Pi­raeus in Greece con­structed by the COSCO Group is con­nected with the “China-Europe Land-Sea Ex­press Line” span­ning across Hun­gary, Ser­bia, Mace­do­nia and Greece, which pro­motes co­or­di­nated de­vel­op­ment of the Balkan Penin­sula and cen­tral and eastern con­ti­nen­tal Europe. The Mom­basa Port con­structed by China in Kenya is the largest port in East Africa. It is not only con­nected through rail­way with Nairobi to sup­port de­vel­op­ment in Kenya’s in­te­rior re­gions, but also serves as an im­por­tant win­dow of eco­nomic de­vel­op­ment for other coun­tries in East Africa and other parts of Africa, such as Uganda, Rwanda, Bu­rundi, South Su­dan, DR Congo and the Repub­lic of the Congo (Zeng et al., 2014). The Port of Dji­bouti con­structed by China is linked with the Ad­dis Ababa-Dji­bouti Rail­way, and pro­vides pre­vi­ously landlocked Ethiopia with ac­cess to the sea. China’s port con­struc­tion projects in Tan­za­nia and Nige­ria are all linked with rail­way lines of host coun­tries to achieve land-sea link­age and re­gional eco­nomic in­te­gra­tion (Wang, 2015). China’s sea­port diplo­macy gives pri­or­ity to im­prov­ing peo­ple’s liveli­hood, which is far more ap­peal­ing than the U.S. pri­or­ity of pro­tect­ing democ­racy.

As can be seen from China’s prac­tice of sea­port diplo­macy, China and the United States have dif­fer­ent opin­ions on the root causes of con­flict in de­vel­op­ing coun­tries. The United States be­lieves that the root cause of re­gional con­flict is the lack of democ­racy, i.e. the so-called “democ­racy deficit” (El­badawi and Mak­disi, 2010), and that the fun­da­men­tal so­lu­tion to re­gional con­flict is to cre­ate a demo­cratic po­lit­i­cal sys­tem based on the rule of law and im­prove hu­man rights in re­gions of con­flict. China con­sid­ers the root cause of re­gional con­flict to be eco­nomic and so­cial prob­lems, and that the fun­da­men­tal so­lu­tion to re­gional con­flict is to pro­mote eco­nomic and so­cial de­vel­op­ment. The Chi­nese govern­ment be­lieves that the U.S. so­lu­tion to re­gional con­flict only ad­dresses the symp­toms, while the Chi­nese so­lu­tion aims to ad­dress the root cause, i.e. by pro­mot­ing se­cu­rity through eco­nomic and so­cial de­vel­op­ment (Sun, 2015). China’s par­tic­i­pa­tion in the de­vel­op­ment of sea­ports along the Mar­itime Silk Road is an eco­nomic and in­vest­ment ac­tiv­ity, which is more con­ducive to the po­lit­i­cal sta­bil­ity and se­cu­rity of host coun­tries.

China’s sea­port diplo­macy in the new era is an eco­nomic diplo­macy driven by in­te­grated eco­nomic and diplo­matic goals. Un­der this ap­proach, diplo­matic work is put at the ser­vice of in­ter­na­tional eco­nomic co­op­er­a­tion, and diplo­matic goals are achieved through in­ter­na­tional eco­nomic co­op­er­a­tion. In­ter­na­tional and do­mes­tic agen­das are co­or­di­nated, and syn­chro­nized progress is made on both fronts of mar­ket ex­plo­ration—all of which pro­motes coun­try-to-coun­try diplo­macy (SIRPA Think­tank, 2016). As

Chi­nese en­ter­prises take an in­creas­ingly ac­tive part in the de­vel­op­ment of sea­ports along the Mar­itime Silk Road, China’s sea­port diplo­macy will ex­ert a far-reach­ing in­flu­ence.

First, China’s par­tic­i­pa­tion in sea­port de­vel­op­ment along the Mar­itime Silk Road is con­ducive to China’s eco­nomic open­ness. With the “go­ing global” of Chi­nese com­pa­nies, over­seas port de­vel­op­ment has be­come an im­por­tant means for China to par­tic­i­pate in global eco­nomic and se­cu­rity man­age­ment. Ac­cord­ing to the Sug­ges­tions of the CPC Cen­tral Com­mit­tee on the For­mu­la­tion of the 13th FiveYear Plan for Na­tional Eco­nomic and So­cial De­vel­op­ment, sea­ports are an im­por­tant part and strate­gic ful­crum of the Mar­itime Silk Road ini­tia­tive and have played an im­por­tant role in help­ing achieve the goals of the 13th Five-Year Plan, i.e. “to main­tain a medium-high eco­nomic growth rate, ac­cel­er­ate in­dus­trial re­lo­ca­tion and in­ter­na­tional in­dus­trial ca­pac­ity co­op­er­a­tion, and co­or­di­nate do­mes­tic and in­ter­na­tional af­fairs.” In the long run, sea­port de­vel­op­ment along the Mar­itime Silk Road will play an ac­tive role in achiev­ing China’s west­ward open­ness and pro­mot­ing in­dus­trial co­op­er­a­tion with coun­tries in South­east Asia, South Asia, West Asia and East Africa along the Mediter­ranean coast.

Se­cond, China’s par­tic­i­pa­tion in the sea­port de­vel­op­ment along the Mar­itime Silk Road is con­ducive to “re­glob­al­iza­tion” for China and rel­e­vant coun­tries. Pro­posed by China, the Belt and Road Ini­tia­tive breaks away from the “core-peripheral struc­ture” and un­even glob­al­iza­tion dom­i­nated by the Western world for cen­turies. It rep­re­sents an ef­fort of “re­glob­al­iza­tion,” which is spear­headed by de­vel­op­ing coun­tries and is an out­come of a new stage in world eco­nomic de­vel­op­ment. In 2013, China pro­posed the Belt and Road Ini­tia­tive with am­bi­tious vi­sions for port de­vel­op­ment. The Belt and Road Ini­tia­tive is a ma­jor eco­nomic de­vel­op­ment ini­tia­tive pro­posed by China for the first time. It is a blue print to sup­port China’s emer­gence on a con­tin­u­ous ba­sis and to im­prove sea­port trad­ing and ship­ping re­la­tion­ships through­out the world; thus, the Belt and Road Ini­tia­tive will be­come a driver of “re­glob­al­iza­tion” for de­vel­op­ing coun­tries in the 21st cen­tury (Zhao, 2016; Feng, 2015).

Third, China’s par­tic­i­pa­tion in port de­vel­op­ment along the Mar­itime Silk Road helps pro­mote po­lit­i­cal and so­cial sta­bil­ity in the de­vel­op­ing coun­tries in­volved. Most coun­tries along the Mar­itime Silk Road are de­vel­op­ing coun­tries. De­spite rapid pop­u­la­tion growth, em­ploy­ment pres­sures, so­cial fric­tions and po­lit­i­cal un­rest, these coun­tries en­joy huge de­vel­op­ment po­ten­tial. Most Mar­itime Silk Road coun­tries have one or two ma­jor ports. In ad­di­tion to their well-de­vel­oped ports, some coun­tries like the Philip­pines, Malaysia, In­done­sia and the UAE also have a num­ber of or­di­nary ports in the re­gion that are yet to be de­vel­oped. From the South China Sea to the In­dian Ocean and from the Red Sea to the Mediter­ranean, most sea­ports have lim­ited lo­gis­ti­cal per­for­mance and po­ten­tial not fully tapped. Ex­am­ples in­clude Myan­mar and Cam­bo­dia in South­east Asia, Bangladesh, Pak­istan and Sri Lanka in South Asia, Ye­men, Iran and Syria in West Asia; Pa­pua New Guinea in the Ocea­nia, and most African ports are even less ef­fi­cient (Xie & Zhao, 2016). China’s par­tic­i­pa­tion in port de­vel­op­ment in de­vel­op­ing coun­tries is guided by three be­liefs that: (1) de­vel­op­ment is the fun­da­men­tal so­lu­tion to the pri­mary so­cial chal­lenges fac­ing de­vel­op­ing coun­tries, (2) peo­ple’s liveli­hood is the key to na­tional gover­nance, and (3) port de­vel­op­ment is an engine of eco­nomic take­off for landlocked re­gions. In Jan­uary 2016, this ap­proach was elab­o­rated by Chi­nese Pres­i­dent Xi Jin­ping at the Head­quar­ters of the Africa Union in Cairo say­ing “the key to solv­ing dilemma lies in ac­cel­er­ated de­vel­op­ment. The root cause of tur­moil in the Mid­dle East is the lack of de­vel­op­ment, and the so­lu­tion also lies in de­vel­op­ment. De­vel­op­ment

21 con­cerns peo­ple’s life and dig­nity.”

Lastly, China’s par­tic­i­pa­tion in sea­port de­vel­op­ment helps the in­ter­na­tional com­mu­nity safe­guard the se­cu­rity of mar­itime en­ergy trans­porta­tion and pas­sages. Trade routes along South­east Asia, the South Pa­cific Ocean, the In­dian Ocean, the Red Sea, the Mediter­ranean and the At­lantic Ocean are re­spon­si­ble for nat­u­ral gas im­port; more­over, 42.6% of im­port and ex­port com­modi­ties pass through these

routes, which form a key di­rec­tion un­der the Belt and Road Ini­tia­tive (Liu, 2014). The im­por­tance of in­fra­struc­ture, par­tic­u­larly sea­ports, to the Belt and Road Ini­tia­tive is com­pa­ra­ble to blood ves­sels (Guan, 2015). In re­cent years, the se­cu­rity of in­ter­na­tional trans­porta­tion routes has been se­ri­ously dis­rupted by pirates in the Gulf of Aden and by ter­ror­ist groups such as ISIS and Al-Qaeda. Their ter­ror­ist ac­tiv­i­ties in So­ma­lia, Ye­men, the Si­nai Penin­sula and South­east Asia, along with dis­rup­tions by sep­a­ratists in Pak­istan and Myan­mar, do­mes­tic po­lit­i­cal tur­bu­lence in coun­tries like Sri Lanka and Mal­dives, as well as do­mes­tic con­flicts in Syria and Libya—all make in­ter­na­tional se­cu­rity at sea and in the ports a high­pri­or­ity con­cern. China’s par­tic­i­pa­tion in sea­port de­vel­op­ment along the Mar­itime Silk Road is of great sig­nif­i­cance to main­tain­ing the se­cu­rity of petroleum trans­porta­tion and of trade routes in the Strait of Malacca, the Strait of Hor­muz, the Strait of Bab al Mandab, the Turk­ish Straits, the Suez Canal and the Strait of Gi­bral­tar. Chi­nese sea­port de­vel­op­ment helps China pro­vide pub­lic goods with se­cu­rity in the mar­itime sphere. China’s over­seas in­fra­struc­ture con­struc­tion, in­clud­ing sea­ports, rail­ways and in­dus­trial zones, will help China ex­port its stan­dards and equip­ment and en­hance its in­dus­trial strength. Mean­while, sea­ports con­structed by China will pro­vide Chi­nese ships with sup­ply and main­te­nance ser­vices, main­tain mar­itime trans­porta­tion se­cu­rity, in­crease pro­tec­tion of crit­i­cal nav­i­ga­tion routes, and com­pen­sate for the deficit of se­cu­rity pub­lic goods by the U.S., EU and Rus­sia (Zhang, 2016).

4. Char­ac­ter­is­tics of China’s Sea­port Diplo­macy

Over­seas port de­vel­op­ment in­volves com­plex eco­nom­ics, gover­nance, and po­lit­i­cal is­sues. China’s rich ex­pe­ri­ence in sea­port de­vel­op­ment in the Mar­itime Silk Road coun­tries can be sum­ma­rized as fol­lows:

4.1 Govern­ment-En­ter­prise In­ter­ac­tion

While Chi­nese com­pa­nies like COSCO Ship­ping Ports, China Mer­chants Port Hold­ings, China Har­bor En­gi­neer­ing Corp. ( CHEC) and China Road & Bridge Corp. ( CRBC) pur­sue com­mer­cial in­ter­ests, the Chi­nese govern­ment pro­vides pro­tec­tion and fa­cil­i­ta­tion for their over­seas op­er­a­tions. Vis­its to the Mar­itime Silk Road coun­tries by Chi­nese lead­ers (in­clud­ing the Pres­i­dent, Pre­mier, NPC Stand­ing Com­mit­tee Chair­man, Vice Pre­mier, State Coun­cilors and min­is­ters) co­in­cided with the dates of the ex­e­cu­tion and im­ple­men­ta­tion of over­seas port projects. The govern­ment-en­ter­prise re­la­tion­ship is man­i­fested in sea­port diplo­macy by the sign­ing of sea­port de­vel­op­ment agree­ments by Chi­nese lead­ers as im­por­tant re­sults of their vis­its. At im­por­tant time points of over­seas port ten­der­ing and im­ple­men­ta­tion, the Chi­nese govern­ment of­ten in­vited the pres­i­dents and prime min­is­ters of tar­get coun­tries to China for mul­ti­lat­eral meet­ings to cre­ate plat­forms for Chi­nese port com­pa­nies to ex­pand their over­seas op­er­a­tions. In this re­gard, China’s sea­port diplo­macy shares a great deal of sim­i­lar­ity with its ex­press train diplo­macy.

In ad­di­tion to mu­tual vis­its be­tween heads of state and govern­ment, China has also is­sued pref­er­en­tial poli­cies and fi­nanc­ing op­tions to en­cour­age its sea­port com­pa­nies to ex­pand over­seas op­er­a­tions. In Jan­uary 2017, the China De­vel­op­ment Bank (CDB) pro­vided the COSCO Group with a credit loan of 180 bil­lion yuan to ex­pand its in­ter­na­tional ship­ping busi­ness. Since 2010, COSCO Group, China Mer­chants Port Hold­ings and Chi­nese Over­seas Port Hold­ings have made over­seas in­vest­ments worth more than 4 bil­lion US dol­lars, and ac­quired shares of 21 ports out of the world’s 50 big­gest con­tainer ports. They also in­jected cap­i­tal worth 40 bil­lion US dol­lars into the do­mes­tic ports in China. As an ex­ec­u­tive with a for­eign sea­port com­pany said that the Chi­nese are able to make longer plans, and sign agree­ments with some sen­si­tive coun­tries in Asia and Africa, whereas the Western pri­vate com­pa­nies may not con­sider a fu­ture in­vest­ment plan longer than 12 months. In par­tic­u­lar, share­hold­ers

22 and pub­lic opin­ion will not al­low Western com­pa­nies to in­vest in cer­tain coun­tries.

Par­tic­i­pa­tion of large Chi­nese state-owned sea­port com­pa­nies in over­seas ports de­vel­op­ment is con­sis­tent with the goals of China’s re­form and open­ing-up. China’s Mar­itime Silk Road ini­tia­tive helps ex­pand its eco­nomic pres­ence through com­mer­cial port de­vel­op­ment, which en­hances its great power sta­tus, im­proves global gover­nance and builds a com­mu­nity of shared des­tiny for hu­mankind. In this man­ner, China as a per­ma­nent mem­ber of the UN Se­cu­rity Coun­cil will be able to ex­ert a unique in­flu­ence in South­east Asia, the South Pa­cific Ocean, the In­dian Ocean, the Red Sea, the Mediter­ranean and the At­lantic Ocean (Sun, 2014). China’s ac­qui­si­tion of a lo­gis­ti­cal sup­port base at Dji­bouti was made pos­si­ble by the China Mer­chants Port Hold­ings’ par­tic­i­pa­tion in the de­vel­op­ment of the Port of Dji­bouti. Chi­nese in­vest­ment in port Fer­nao Dias fos­tered the es­tab­lish­ment of diplo­matic re­la­tions among China, Sao Tome and Principe.

4.2 Co­or­di­na­tion among Var­i­ous Cen­tral Govern­ment Min­istries

When Chi­nese Pres­i­dent, Pre­mier, NPC Stand­ing Com­mit­tee Chair­man, CPPCC Na­tional Com­mit­tee Chair­man and mem­bers of the CPC Cen­tral Com­mit­tee Polit­buro led del­e­ga­tions to visit the Mar­itime Silk Road coun­tries and sign port co­op­er­a­tion agree­ments, they usu­ally in­vited min­is­ters from the NDRC, the Min­istry of For­eign Af­fairs, the Min­istry of Com­merce and the Min­istry of Trans­porta­tion to go with them and jointly dis­cuss ma­jor projects of the Mar­itime Silk Road ini­tia­tive in coun­tries like Malaysia, Brunei, Greece, Sri Lanka, Myan­mar, Egypt and Bel­gium. Of course, these facts are pri­mar­ily based on pub­lic me­dia re­ports. It takes fur­ther re­search to un­ravel the in­ter­nal co­or­di­na­tion among the NDRC’s De­part­ment of In­ter­na­tional Co­op­er­a­tion and var­i­ous re­gional af­fairs de­part­ments of the Min­istry of For­eign Af­fairs (in­clud­ing the De­part­ment of Asian Af­fairs, De­part­ment of West Asian and North African Af­fairs, De­part­ment of African Af­fairs, and De­part­ment of Euro­pean Af­fairs) and the De­part­ment of In­ter­na­tional Co­op­er­a­tion of the Min­istry of Trans­porta­tion, as well as the in­ter­nal co­or­di­na­tion of the Steer­ing Group for the Belt and Road Ini­tia­tive.

4.3 Mu­tual Sup­port be­tween Cen­tral and Lo­cal Gov­ern­ments

China’s par­tic­i­pa­tion in sea­port de­vel­op­ment along the Mar­itime Silk Road re­flects a close co­or­di­na­tion be­tween cen­tral and lo­cal gov­ern­ments. Un­der the Belt and Road Ini­tia­tive, com­pa­nies from coastal prov­inces like Shan­dong, Guangxi, He­bei and Zhe­jiang and Shang­hai Mu­nic­i­pal­ity, such as the Shan­dong Land­bridge Group, the Guangxi Beibu Gulf In­ter­na­tional Port Group, the He­bei Port Group, the Ningbo Zhoushan Port Group and the Shang­hai In­ter­na­tional Port Group, all of which have ac­tively ex­panded over­seas busi­ness op­er­a­tions and fa­cil­i­tated the im­ple­men­ta­tion of Mar­itime Silk Road in­fra­struc­ture projects.

In par­tic­i­pat­ing in sea­port de­vel­op­ment along the Mar­itime Silk Road, China also aims to de­velop and open up its in­te­rior prov­inces. Through over­seas port de­vel­op­ment, China’s in­te­rior re­gions may par­tic­i­pate in re­gional eco­nomic in­te­gra­tion un­der the cen­tral govern­ment’s plan­ning and sup­port na­tional diplo­macy. In par­tic­u­lar, China’s south­west­ern, south­ern and north­west­ern re­gions will be­come key ben­e­fi­cia­ries of the Belt and Road Ini­tia­tive. Over the years, there have been con­tro­ver­sies in the in­ter­na­tional re­la­tions academia re­gard­ing whether land power or sea power should en­joy pri­or­ity. Most of academia do not want to see a union of land power with sea power, believ­ing that only one should pre­vail. China’s par­tic­i­pa­tion in sea­port de­vel­op­ment along the Mar­itime Silk Road aims to in­te­grate land power with sea power. It is in­tended to pro­mote trade and in­ter­de­pen­dence be­tween China and coun­tries in Europe, Asia and Africa through land and sea based on mu­tual ben­e­fit. For in­stance, the Xin-He-Yan-Ri rail­way line con­nects Rizhao Port (in coastal Shan­dong Prov­ince) with Long­hai Rail­way in China’s western re­gion, and ex­its China through Alataw pass of Xin­jiang Uygur Au­ton­o­mous Re­gion, reach­ing Rot­ter­dam in the Nether­lands through Cen­tral and Western Asia. China’s first heavy-load rail­way, the Cen­tral and South Shanxi Rail­way, also has di­rect ac­cess to port. Shugang Ex­press­way with

port ac­cess con­nects with Ri­lan and Shen­hai ex­press­ways. These four na­tional high­way trunk lines lead to all parts of China (Du, 2016), form­ing a trans­porta­tion net­work of high­ways, rail­ways and sea­ports.

Sea­ports are im­por­tant plat­forms that con­nect coastal re­gions with in­te­rior prov­inces, en­abling trade and pro­mot­ing bal­anced re­gional eco­nomic de­vel­op­ment. Sea­ports in China strive for the sta­tus of re­gional hubs by ex­pand­ing their cov­er­age of the hin­ter­land. De­vel­op­ment of the ship­ping in­dus­try led to the pros­per­ity of port cities as driv­ers of re­gional eco­nomic de­vel­op­ment (Hall et al., 2016). Through port de­vel­op­ment, the As­so­ci­a­tion of South­east Asian Na­tions (ASEAN) mem­ber coun­tries in­creased con­nec­tiv­ity with each other at land and at sea (Wang, 2007). The Bangladesh-China-In­di­aMyan­mar Eco­nomic Cor­ri­dor pro­posed by China in­tends to in­te­grate China with ASEAN and other Asian economies through port, rail­way and high­way net­works, and thereby achieve re­gional eco­nomic in­te­gra­tion in South­east Asia and South Asia. China’s con­struc­tion of the Kyaukpyu Port in Myan­mar pro­motes the open­ness of its south­west­ern landlocked prov­inces. China, Myan­mar, South Korea and In­dia have jointly in­vested in a nat­u­ral gas pipe­line with ac­cess to Myan­mar’s south­west­ern shore. As its first ter­mi­nal, the Kyaukpyu ter­mi­nal is con­nected with China’s Yun­nan Prov­ince through a gas pipe­line of 793 kilo­me­ters. This pipe­line is an­other ex­am­ple of in­ter­twined cor­po­rate and govern­ment in­ter­ests (Wang, 2015). As part of its China-Pak­istan Eco­nomic Cor­ri­dor pro­gram, China’s con­struc­tion of the Gwadar Port has boosted eco­nomic de­vel­op­ment in its Xin­jiang re­gion and in­creased con­nec­tiv­ity be­tween its north­west­ern prov­inces and Pak­istan, Afghanistan and Cen­tral Asian coun­tries.

4.4 Win-Win Co­op­er­a­tion be­tween China and Tar­get Coun­tries

China’s co­op­er­a­tion with Mar­itime Silk Road coun­tries on sea­port de­vel­op­ment links each other’s de­vel­op­ment strate­gies. Such co­op­er­a­tion aims to con­trib­ute to the de­vel­op­ment strate­gies of tar­get coun­tries, such as Egyp­tian Pres­i­dent el-Sisi’s Eco­nomic Re­vi­tal­iza­tion Plan, Saudi Ara­bia’s Vi­sion 2030 and Tur­key’s Vi­sion 2023.

As Chi­nese port com­pa­nies op­er­ate in for­eign coun­tries, China’s ap­proach of putting a pre­mium on peo­ple’s liveli­hood has been ac­cepted by more and more coun­tries. In May 2016, Chi­nese For­eign Min­is­ter Wang Yi said at the open­ing cer­e­mony of the Sev­enth Min­is­te­rial Con­fer­ence of China-Arab Co­op­er­a­tion Fo­rum that: “We should make rail­ways and ports the sym­bols of China-Arab co­op­er­a­tion.” China sup­ports Chi­nese com­pa­nies that par­tic­i­pate in rail­way net­work con­struc­tion in the Arab Penin­sula and in North Africa and helps Chi­nese prov­inces and re­gions es­tab­lish friendly ports with im­por­tant port cities in the Arab world. China stands ready to work to­gether with Arab coun­tries to pro­mote in­dus­try­har­bor in­te­gra­tion, and de­velop ports with su­pe­rior re­gional con­di­tions into in­te­grated cen­ters for eco­nomic de­vel­op­ment, trade co­op­er­a­tion and in­dus­trial pro­duc­tion fol­low­ing the “port plus in­dus­trial

23 zone” model. For in­stance, Dji­bouti has a pop­u­la­tion of 900,000 but its un­em­ploy­ment is as much as 48%, with 42% of its pop­u­la­tion liv­ing below the poverty line. In re­cent years, China’s sea­port and air­port in­vest­ments in Dji­bouti amounted to 12 bil­lion US dol­lars, which cre­ated jobs and eco­nomic growth con­ducive to so­cial sta­bil­ity. Dji­bouti serves as an ex­am­ple for other medium and small-sized coun­tries in Africa; thus, Dji­bouti is ex­pected to be­come the “Sin­ga­pore of East Africa” (Jef­frey, 2016).

5. Con­clud­ing Re­marks

Tra­di­tion­ally an agrar­ian civ­i­liza­tion, China had lim­i­ta­tions in its na­tional gover­nance phi­los­o­phy that at­tached more im­por­tance to agri­cul­ture than com­merce and fa­vored land se­cu­rity over mar­itime se­cu­rity. Since re­form and open­ing-up in 1978, China has ac­cel­er­ated its tran­si­tion from an in­ter­nal­ly­ori­ented econ­omy to an ex­ter­nally-ori­ented econ­omy that re­lies on mar­itime chan­nels (Wang, 2009). At

the be­gin­ning of the 21st cen­tury, China started to give more pri­macy to the de­vel­op­ment of strate­gic mar­itime chan­nels and a mar­itime power. Par­tic­i­pa­tion in sea­port de­vel­op­ment along the Mar­itime Silk Road not only ex­pands China’s do­mes­tic in­fra­struc­ture con­struc­tion ca­pac­ity but fa­cil­i­tates the tech­nol­ogy up­grade of Chi­nese sea­port com­pa­nies as well.

China has gained ex­ten­sive ex­pe­ri­ence from over­seas port de­vel­op­ment, but there is also room for im­prove­ment in the fu­ture. Through sea­port de­vel­op­ment along the Mar­itime Silk Road, China’s in­ten­tion is to help re­build in­fra­struc­ture in war- torn coun­tries and pro­mote in­ter­con­nec­tiv­ity of mar­itime economies. In ad­di­tion, China has also ex­panded its over­seas in­vest­ment mar­kets through port in­fra­struc­ture de­vel­op­ment in tar­get coun­tries. These port projects in­clude the Port of Dar­win in Aus­tralia, the Port of Akyab and the Kyaukpyu Port in Myan­mar, the Si­hanoukville Port in Cam­bo­dia, the Port of Dhaka in Bangladesh, the Ham­ban­tota Port and the Port of Colombo in Sri Lanka, the Mom­basa Port (the largest port of Kenya and in East Africa) and the Port of Pi­raeus in Greece. How­ever, many chal­lenges have also emerged from these sea­port projects and need to be ad­dressed through diplo­matic, eco­nomic and le­gal means. In par­tic­u­lar, port con­struc­tion in­volves a long cy­cle with sig­nif­i­cant in­vest­ment and un­cer­tain­ties. Port con­struc­tion is also sub­ject to the in­flu­ence of the tar­get coun­tries’ do­mes­tic pol­i­tics and in­ter­ven­tion from other coun­tries. Chi­nese com­pa­nies that par­tic­i­pate in over­seas port con­struc­tion must pre­vent four types of risks: (1) eco­nomic risks, (2) le­gal risks, (3) po­lit­i­cal risks and (4) se­cu­rity risks (Sun, 2015). Eco­nomic risks re­fer to un­cer­tain prof­itabil­ity of par­tic­i­pa­tion in sea­port con­struc­tion. Le­gal risks stem from pos­si­ble le­gal re­stric­tions of tar­get coun­tries in the process of port con­struc­tion, op­er­a­tion and ac­qui­si­tion, in­clud­ing en­vi­ron­men­tal, so­cial and em­ploy­ment prob­lems from port con­struc­tion. Po­lit­i­cal risks re­fer to the im­pact of tar­get coun­tries’ change of govern­ment and changes in do­mes­tic and in­ter­na­tional pub­lic opin­ion on port de­vel­op­ment. Se­cu­rity risks in­clude both nat­u­ral dis­as­ters and man-made risks like ter­ror­ism.

First, Chi­nese com­pa­nies should take their own ini­tia­tive to re­duce risks and seek diplo­matic sup­port and in­ter-min­is­te­rial co­or­di­na­tion. Par­tic­i­pa­tion of Chi­nese com­pa­nies in sea­port de­vel­op­ment along the Mar­itime Silk Road pro­motes bor­der se­cu­rity and ex­ten­sion of na­tional in­ter­est. China should in­cor­po­rate sea­port de­vel­op­ment along the Mar­itime Silk Road as a key com­po­nent of China’s for­eign af­fairs strat­egy and in­crease co­or­di­na­tion among the Min­istry of Trans­porta­tion, the Min­istry of Com­merce, the Min­istry of For­eign Af­fairs and the NDRC by align­ing cor­po­rate in­ter­ests with na­tional in­ter­ests and sup­port­ing the de­vel­op­ment of sea­port en­ter­prises through diplo­matic, po­lit­i­cal, le­gal and fi­nan­cial means (Sun, 2016).

Se­cond, the govern­ment should con­tinue to pro­vide Chi­nese com­pa­nies with rea­son­able guid­ance in their par­tic­i­pa­tion in the de­vel­op­ment of Mar­itime Silk Road sea­ports. In the new era, high-speed trains and port con­struc­tion have be­come sym­bols of “made in China”. Re­gard­ing high-speed trains, ma­jor Chi­nese SOEs in­clude the China Rail­way En­gi­neer­ing Cor­po­ra­tion (CRECG), the China Rail­way Con­struc­tion Cor­po­ra­tion (CRCC), China South Rail­way (CSR), and China CNR Cor­po­ra­tion Lim­ited (CNR). As for port con­struc­tion, China COSCO Ship­ping Group, China Mer­chants Port Hold­ings, Shang­hai In­ter­na­tional Port Group, China Har­bor En­gi­neer­ing Com­pany Ltd. (CHEC) and China Road & Bridge Cor­po­ra­tion (CRBC), etc., are all im­por­tant com­pa­nies that par­tic­i­pate in the con­struc­tion of Silk Road ports. Among the top six port op­er­a­tors in the world (Hutchi­son Ports, China Mer­chants Port Hold­ings, PSA In­ter­na­tional, COSCO Ship­ping Ports, Dubai Ports World and Maersk), three are from China. This shows the grow­ing im­por­tance and strength of China in sea­port con­struc­tion and op­er­a­tion. De­vel­op­ment of Mar­itime Silk Road ports by the Chi­nese com­pa­nies fea­tured here is con­sis­tent with China’s long-term diplo­matic and po­lit­i­cal in­ter­ests. But China should also avoid ex­ces­sive in­vest­ment and re­dun­dant con­struc­tion to pre­vent risks.

Third, China should ex­plore a mixed own­er­ship model. China’s par­tic­i­pa­tion in over­seas port con­struc­tion is vul­ner­a­ble to ill-in­tended ac­cu­sa­tions like “neo­colo­nial­ism” and “cred­i­tor im­pe­ri­al­ism”, which are of­ten played up by ex­treme na­tion­al­ists and Western me­dia. It is sug­gested that China in­vites

lo­cal com­pa­nies and port com­pa­nies from other coun­tries to jointly con­struct and op­er­ate sea­ports. An ex­am­ple is the strate­gic co­op­er­a­tion be­tween Chi­nese com­pa­nies and Hutchi­son Ports. In Jan­uary 2013, China Mer­chants Port Hold­ings an­nounced a plan to ac­quire a 49% stake of CMA, CGM’s whol­ly­owned ter­mi­nal port com­pany at 400 mil­lion eu­ros (Gan, 2015). China has wel­comed qual­i­fied port com­pa­nies from the Mar­itime Silk Road coun­tries to in­vest in China’s port and dock projects to achieve two-way in­ter­ac­tions of port de­vel­op­ment. For in­stance, UAE’s DP World op­er­ates over 20 ports in China, South­east Asia and South Asia24, which prompted the UAE to par­tic­i­pate in China’s Belt and Road Ini­tia­tive.

Lastly, China’s pri­vate se­cu­rity com­pa­nies should also par­tic­i­pate in its over­seas port de­vel­op­ment projects. In ad­di­tion to diplo­matic and le­gal means, pro­tec­tive se­cu­rity de­tail (PSD) ser­vices are also im­por­tant to pro­tect­ing China’s over­seas in­ter­ests. Given China’s de­fen­sive diplo­matic prin­ci­ple, send­ing se­cu­rity de­tails over­seas is an im­por­tant way for China to of­fer con­sular pro­tec­tion. Hir­ing pro­fes­sional PSD com­pa­nies is an ef­fec­tive way to en­sure mar­itime trans­porta­tion se­cu­rity. It is con­sis­tent with in­ter­na­tional law and is per­mit­ted un­der the laws of many de­vel­oped coun­tries and re­gions. This ap­proach is of strate­gic sig­nif­i­cance to China’s over­all mar­itime se­cu­rity (Li, 2015). It is ad­vis­able for China to send PSD com­pa­nies to par­tic­i­pate in con­sular pro­tec­tion and of­fer PSD ser­vices for per­son­nel and in­vest­ment projects. Stan­dard pro­ce­dures should be for­mu­lated for the over­seas op­er­a­tions of Chi­nese PSD com­pa­nies.

In a nut­shell, China’s par­tic­i­pa­tion in sea­port de­vel­op­ment along the Mar­itime Silk Road has en­riched China’s diplo­matic “tool­box”, en­hanced diplo­matic in­sti­tu­tional in­no­va­tion, and in­creased in­ter­de­part­men­tal co­or­di­na­tion for the man­age­ment of Mar­itime Silk Road op­er­a­tions. China’s sea­port diplo­macy in the new era is an in­te­grated diplo­macy. Min­is­te­rial agen­cies like the NDRC, the Min­istry of For­eign Af­fairs, the Min­istry of Com­merce and the Min­istry of Trans­porta­tion are brought un­der the co­or­di­na­tion of the Steer­ing Group for the Belt and Road Ini­tia­tive. In ad­di­tion to cen­tral-lo­cal govern­ment and govern­ment- en­ter­prise co­or­di­na­tion, China has also forged part­ner­ships be­tween Chi­nese port com­pa­nies and their coun­ter­parts from the Silk Road coun­tries to ben­e­fit from each other’s ad­van­tages and con­trib­ute to re­gional peace and de­vel­op­ment. This ap­proach has en­riched China’s vi­sion to “be­come a strong mar­itime power”.

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.