by Professor Richard T. Griffiths, director of the New Silk Road Projects, IIAS and Leiden University
There are two extreme interpretations of China’s Maritime Silk Road (MSR). One sees it as a policy to obtain strategic naval advantage. The other sees it as a benign effort to bring less advantaged countries into the global trading system. The first is Indian or American, the second is Chinese.
The ‘Maritime Silk Road’ (MSR) does not exist, and it probably never did. In 2013, however, the memory of the Silk Road, replete with all its myths and legends, was revived by China’s President Xi Jinping to encapsulate the scope and range of a new initiative aimed at creating a more just, balanced, prosperous and peaceful world order. The amounts involved are mind-boggling, with Western estimates ranging from $1 trillion to $8 trillion. China’s ‘Belt and Road initiative’ (BRI) also included a maritime component – the Maritime Silk Road (MSR), expressed as a string of ports in which China had invested, or planned to do so in the future.
Especially in the USA, where ‘China’s rise’ was seen as a threat to its global hegemony, policy-makers and academics eager to advise them began a debate about the BRI’s true intentions. Few observers seem ready to accept Chinese claims that the BRI was intended to promote global peace and prosperity.
For American geo-strategists, the appearance of Chinese investments in ‘strategic’ ports was viewed as lures to capture influence in host countries or as forerunners of future naval assets. In December 2018 the US Defence Department wrote ‘… some Belt and Road investments could create potential military advantages for China, should it require access to selected foreign ports to preposition the necessary logistics support to sustain naval deployments to protect its growing interests in waters as distant as the Indian Ocean, Mediterranean Sea, and Atlantic Ocean.’ I admit that a deep-water port with facilities can, with the necessary work, be converted to naval use, but that is true of any deep-water port.
Let us focus on the ports on the Eurasian land-mass. The issue should not be whether a country is the biggest (i.e. first, second or third), but whether the biggest is big in relative terms. The ‘China scare’ presumably owes its traction to the assumption that state-owned enterprises can be relied upon to advance state policy. Let us start by observing that China is the world’s largest trader. Its share of world maritime trade is close to 18 per cent.
At the start of this year the Nikkei Asia Review reported that that Chinese port operators are investing in existing ports and in constructing new ones, but the figure of 25 ports (or more – the article misses some smaller engagements) it mentions is not a lot. There are over 8,000 ports in the world today, 4,743 of them located in Asia and Europe; 400 in China alone. If we restrict ourselves to ‘major ports and terminals’, there would still be over 3,700.
We can nuance this picture if we focus on container ports; they are not everything but they are responsible for shipping 70-75 per cent of the value of international sea-borne trade. In terms of the volumes handled by ports in which they had an interest (in 2018) the state-owned China Overseas Shipping Company (COSCO) was the largest container port owner in the world with interests in ports responsible for 13.5% of container traffic in 2018 and China Merchant Ports (CMP) was seventh, adding an additional 4.4%. Together they had interests in 75 terminals throughout the world, although 45 were in China itself.
It is in the nature of port operators to build posts abroad. Let us look at the European end of operations. Europe is responsible for about 20 per cent of sea-borne trade but its largest container port operator is the Netherlands-based A.P. Möller (APM) which has a stake in some 60 terminals but managed only a fourth place in the world ranking, with interests in ports responsible for 10.0% of global container throughput. Mapping the ports shows a striking contrast in the geographical spread compared with COSCO/CMP.
Counting ports and speculating on their ‘strategic’ or naval potential is one thing, but for the economic impact implicit in their ownership, we have to account, first, for their annual throughput and, second, for the share of the port operator in that output. This is called the ‘equity adjusted throughput’. If we make these adjustments, the relative size of China diminishes, and it declines still further if we remove the share in the total of port activity in China itself. Under that last calculation, COSCO’s world ranking slumps to fifth position
The Maritime Silk Road could never only be about ports, which are really little more than the derived demand from ships, and the goods they carry – larger ships and more goods means more port investment.
Compare the map of the flow of merchant ships (cargo vessels and tankers) with the map China’s Maritime Silk Road ports, and I still wonder how easily the debate concentrated on a few land-based dots joined by a blue line. It shows the power of metaphor, the MSR metaphor employed by President Xi Jinping in launching the initiative in 2013, but also the official in the defence department who, in 2005, coined the term ‘a string of pearls’ to serve China’s ‘broad security objectives.’.
As with ports, the scare mongering begins with ranking. China, it is proclaimed, has the world’s largest merchant fleet. This is true. China indeed owns more merchant vessels than any other country (11.8%) but, since many are smaller vessels engaged in coastal trade, it ranks only third in the total capacity of the fleet (10.5%), behind Greece and Japan. Measured in terms of the value of the fleet, it ranks third (14.6%) in the ownership of bulk carriers, which carry about half of the tonnage of world shipping, second in container ships (13.6%), third (7%) in oil tankers, eighth (4.0%) in gas carriers and eighth in car carriers (3.0%).
Trade routes belong to no one, whether on land or at sea. China is part of the maritime silk road, but it does not own it and nor does it control it. It is large (and sometimes largest) in global rankings, but its share of the markets is not disproportionate with its share in seaborne trade and nor is it dominant in its influence on the market for port and shipping services.
(The data for this article was taken from: R.T. Griffiths, The Maritime Silk Road. China’s Belt and Road at Sea, Leiden, 2020).