What is China’s Maritime Silk Road?
Maritime Routes and Key Ports & Terminals
Port of Hambantota – a public-private partnership between the Sri Lankan government and China Merchants Port Holdings. It offers the most diversified range of services in the port and maritime industry in Sri Lanka. China invested in this port and notably obtained a 99-year lease to run it.
Colombo Port – primarily a container port – was built based on build-operate transfer by Colombo International Container Terminals Limited (CICT), a joint venture company of China Merchants Port Holdings and SLPA.
China has bolstered its Middle Eastern maritime footprint by operating a new container terminal at Khalifa port via China Ocean Shipping Company, Limited (COSCO).
However, through Hutchison Ports Sohar – owned by Hutchison Ports Holdings of China, it manages Sohar Port‘s container terminal in Oman, reflecting a blend of Chinese, Omani, and international investment under a long-term concession.
Hutchison Ports commenced operations at Saqr Port‘s terminal in Ras Al Khaimah, UAE, as part of a 25-year concession agreement. China Merchants Port Holdings also possess a significant stake in Umm Qasr port terminal, Iraq.
According to official data, China Merchants Port’s substantial investment of 23.5 percent in Djibouti Port Co., Ltd. in 2013 paved the way to start the Multi-Function Dock Project at Multiple Halley in 2014. By May 2017, this project had become fully operational. Djibouti, positioned on the western bank of the Gulf of Aden, holds strategic importance as it also serves Ethiopia.
In January 2021, Saudi Arabia’s Public Investment Fund and Cosco Shipping acquired a stake in Red Sea Gateway Terminal’s operator, DP World, valuing the port operator at approximately $880 million.
In March 2023, Hutchison Ports announced an investment of $700 million in Egypt, focusing on Ain Sokhna Port (Egypt’s biggest port) and a new container terminal, B100, at the Port of Alexandria. This adds up to a total investment of over $1.5 billion in Egypt by the Chinese global port investor. The company also holds significant investments in Egypt’s Abu Qir and El Dekhelia ports.
Cosco Shipping owns over half of Noatum Ports in Spain and has a stake in Malta’s Marsaxlokk port. Shanghai International Port Group operates Haifa’s Bay Port, and two other Chinese firms are constructing Cherchell port in Algeria. Together, Cosco and China Merchants Port Holdings have stakes in a total of seven Mediterranean ports.
Media reports have indicated that as of August 2023, Chinese companies have invested in 31 container terminals across Europe and the Mediterranean. Among these, Chinese state-owned enterprises have full or majority control of two ports: Piraeus in Greece and Zeebrugge in Belgium. Cosco owns 90% of CSP Zeebrugge and has substantial ownership of Piraeus, including 100 percent of terminals 1 and 2, and a 67 percent share of the Piraeus Port Authority.
The Economic Importance of China’s Maritime Silk Road
Trade facilitation enhances China’s maritime trade routes and its connectivity with other countries, reducing transportation costs and transit times. This expedites the flow of goods and services, boosting international trade and economic growth.
Economic cooperation: Through the BRI, Beijing cooperates with partner countries, promoting investment, joint ventures, and economic development. This collaboration can lead to increased mutual trade and investment opportunities.
Industrial capacity cooperation: The initiative fosters cooperation in various sectors, including manufacturing, infrastructure development, and technology transfer. This can help countries along the Maritime Silk Road upgrade their industries and promote economic diversification.
Financial integration: As big creditor to major economies, it has established financial institutions like the Asian Infrastructure Investment Bank (AIIB) to support infrastructure financing in BRI countries. This financial integration promotes economic development by funding projects that may otherwise be financially challenging for host countries, especially in the Global South.