Updated: Feb 22
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The sudden Chinese economic growth occurring at the end of the 1970s, coupled with its government’s strategy to promote Chinese investment abroad at the end of the 1990s gradually reduced the economic gap between China and the Mediterranean. Under Xi Jinping, Chinese diplomacy has become more active, not only through the Belt and Road Initiative (BRI), but also by expanding their economy globally. China heavily invests in infrastructure and acquisitions of European companies. Especially in the Eastern Mediterranean, China is building an enormous economic presence. Its involvement in major infrastructure projects is growing at a rapid pace and may have a significant impact on trade routes that traverse this strategically located region.
The Mediterranean Sea is one of the most important maritime highways of all international trade routes around the globe. It is a focal point, as it represents the western end of the BRI. Given the Mediterranean’s strategic position, China has stepped up its presence in the region by acquiring, building, modernizing, expanding, and operating the most important Mediterranean ports and terminals in Greece, Egypt, Algeria, Turkey, and Israel. Beijing wants to capitalize on the Mediterranean’s geographical proximity to become a major distribution hub for Chinese goods to the European Union (EU), its biggest trading partner. The increasing economic ties between China and Europe are giving the Mediterranean region an opportunity to regain its place at the forefront of international trade. The question many researchers are posing is what is the geostrategic relevance of the Mediterranean?
The Mediterranean is the crossroads of three continents: Africa, Asia, and Europe. Via the Suez Canal and the Straits of Gibraltar, the Mediterranean is the major maritime gateway between East and West. The route northeastward through the Hellespont includes Russia, another important player in the world economy. Whoever controls the Mediterranean has access to the oil resources of the Persian Gulf, the rapidly growing economies of Africa, the military power of NATO, and the economic engine of the European Union. The Mediterranean is also the gateway to the dynamic, unsettled, and sometimes explosive regions of the Middle East and sub-Saharan Africa. Finally, oil and gas resources in the eastern Mediterranean, most recently off the island of Cyprus, are a subject of interest, controversy, and potentially conflict.
Beijing’s maritime activity in the Mediterranean Sea consists mainly of constructing and operating ports or railways. These investments should be seen in the context of the country’s broader infrastructure activities under the BRI. The investment in sea lanes and railways complement each other, as they jointly open up new trade links between China and the Afro-Eurasia zone. China has slowly attempted to develop a presence in the Mediterranean by investing in international logistical distribution centers and infrastructure projects that have strengthened its regional position.
However, while China has many economic partners, its political relations with regional and extra-regional powers are much more complex and fragile. The cooperation between China and European countries, primarily Greece, would form the European Extension of the maritime route. China’s rise as a major economic actor is affecting the positions and interests of the US and Europe in the Eastern Mediterranean.
China is the main geopolitical rival to the United States in the Asia Pacific region. As this rivalry intensifies, it is likely to affect other regions. China has major ambitions in the Eastern Mediterranean in the area of infrastructure and transportation, and the greater its regional involvement becomes, the larger the risk becomes of this spill-over effect, regarding a potential economic trade war with other nations. Europe is almost the perfect site for Chinese investment. Its advanced, complex and import- hungry economies constitute the largest open market in the world. But crucially, it is one that operates with divided governance. That is fine with Beijing, which prefers to deal with smaller, often weaker, economic entities, rather than one powerful overarching force, like the US government.
China is gradually becoming more influential economically, diplomatically, and geostrategically in the Mediterranean Sea. Huge investments and mutually beneficial trade relations between China and Mediterranean countries are increasing Beijing’s stake in regional affairs while exposing it to significant threats. The political instability and religious extremism in several countries in the wider Mediterranean region raises the question of whether Beijing would be willing to take on a leadership role, with all the responsibilities that that would entail. Concerning Italy´s situation , China is Italy’s fastest growing trade partner, a status driven largely by a huge increase in imports and, concomitant Italian trade deficit. At the same time, Chinese investment in Italy has been quite volatile. Almost non-existent before 2010, Chinese investment was still below 1 billion euro per year as late as 2013 but surged to more than 2.5 billion euro in 2014 and more than 7.2 in 2015 before settling down to more moderate levels during 2016 and 2017. Chinese investment has focused on high value-added firms and top brands, but also infrastructure. The level of investment is still modest ,especially in Greece and Turkey, compared to Chinese investments in the UK or Germany. But the rate of growth is substantial and fits into a larger pattern of Chinese activity in the region.
In addition, looking at the tourism industry: Spain, Italy and Greece are also important tourist gateways, both to the countries themselves and to the rest of Europe. Spain and Italy are the most popular destinations for foreign tourists in Europe while Greece, a country one-fifth their size, is sixth. Chinese tourism has exploded in recent years as its middle to upper classes secure disposable income that can be spent touring the world. The Chinese control of Piraeus offers the opportunity for an expansion of tourist facilities.
The United States has a clear interest in adopting a strategy that both pressures China to improve governance standards along the BRI and provides an effective alternative to the initiative—one that promotes sustainable infrastructure, upholds high environmental and anticorruption standards in foreign infrastructure projects, ensures non-Chinese companies can operate on a level playing field in foreign markets, and assists countries in preserving their political independence.
One last consideration about China’s Belt and Road Initiative (BRI), of which the Mediterranean is a key part. The project has forced the United States and Europe to think more seriously about geopolitics for the first time since the Cold War. Geopolitical competition requires the orchestration of political, economic, and security instruments in the words of China’s Foreign Minister. The challenge for the United States and Europe going forward will be to agree on the problems posed by BRI, and then to develop a set of integrated strategies in response. The Mediterranean would be a good starting point, though any such strategy would first need to recognize and overcome several key challenges.
The analysis and conclusions obtained from this article were critically evaluated based on the opinions and information provided from several sources, including Professor Andornini, module leader and professor of "public diplomacy in China", who held multiple lectures and seminars at the University of Turin. Other contributors include Patricia Thornton and Zha Daojing with the material they shared with us, who also teach at Oxford and Peking University respectively. The To China Hub is an immersive summer programme for aspiring graduates looking to launch a career in Far Eastern business.
Francesca Accattino is a final year international relations student at the University of Turin. Initially, starting out studying law, she switched programmes in her second year to pursue her passion for international relations, mainly within the realms of development and inter country cooperation. In this last year, she has specialised in developments within the Far East, having participated in the annual To China Hub last summer where she collaborated with professors in the field ranging from Yale to the London School of Economics. Besides that, she likes to take part in multiple extra curricular activities, and is her class representative for the political science department. Furthermore, she is an active debater, having participated in model United Nations conferences at a university level. Last but not least, she loves travelling, meeting new cultures, and art exhibitions. You can find her on LinkedIn.
The opinions expressed here are those of the writers and do not represent the views of European Guanxi.
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