Im(port)ant Dependencies: Chinese FDI and ‘Dependence’ Narratives in EU Ports

'We often say that to get rich we must first build roads; but in coastal areas, to get rich we must also first build ports.'

Xi Jinping, Tieshan Port, Guangxi, April 2017 (CFR)

Beginning with the European Coal and Steel Community in 1951, the European Union, at its earliest roots, identified the centrality of a common market to the continent’s economic prosperity. Since then, European leaders have consistently recognised that physical connectivity is a prerequisite for market integration, whether through transport corridors, energy networks, or maritime gateways that link the continent to global trade flows.

Maritime ports play a particularly central role in connecting European markets and in critically integrating the EU’s common market into the global economy. According to the UN Trade and Development’s 2021 Review of Maritime Transport, over 80% of international trade is carried by sea, a percentage even higher in many developing countries. In the EU, 74% of goods enter or leave via ports.

Figure 1: Europe’s 100 Busiest Ports (Landgeist)

Sufficient port logistics is therefore a critical component of economic competitiveness, yet discussions in Brussels have been far from focused on infrastructure improvements. Instead, as Chinese investments in European ports have increased over the past decade, there is a growing trend across academia and governments to focus predominantly on a single concern: dependence. What are the implications for European prosperity and political flexibility if some of the EU’s most critical infrastructure is not only minority-owned but fully operated by firms from its ‘Systemic Rival’? Subsequent measures have been implemented to regulate Chinese FDI and increase oversight, yet debates persist. 

However, these concerns obscure more pressing questions. As the continent faces stalled economic growth, how much can its leaders afford to choke incoming investment from the world’s second-largest pole of capital? With mounting debt pressures and ongoing geopolitical tensions, the debate increasingly turns on when commercial ties become political dependencies, yet what constitutes “dependence” remains poorly defined and ever-expansive, whether operational control, political influence, economic reliance, or informational access.

This article argues that while vigilance over critical infrastructure is necessary, the unclear bounds of the prevailing dependency narrative risks overstating the strategic leverage port investments provide, while understating their economic importance for a stagnating Europe. Though current attention focuses on investments in ports, these questions will only grow in importance as Chinese companies continue their outward investment strategy (‘Going Out’, 出去) and Europe struggles to find its place within an increasingly multipolar world.

The Dependency Narrative

Global investment by Chinese firms began to accelerate in 2013 with the launch of the Belt and Road Initiative (BRI). Echoing its ancient namesake, the BRI is a Chinese government initiative aimed at expanding trade networks, creating market opportunities, and bending global trade flows towards China. Initially driven by state-backed loans and large-scale infrastructure projects, the initiative has recently shifted towards a ‘Small and Beautiful’ (小而美) approach, with private sector investment increasing, according to the Griffith Asia Institute’s 2025 BRI Investment Report.

Figure 2: Chinese Port Investments + Ownership (CFR)

Though the BRI has assisted in developing many infrastructure projects in countries that have struggled to obtain loans through traditional financing vehicles like the IMF or World Bank, maritime ports have emerged as a particular priority and heavily scrutinised recipients of investment. One of the most infamous cases is that of the Hambantota Port. Following Sri Lanka’s inability to repay a BRI-financed loan to build the port, the government agreed to lease it to a Chinese company for 99 years, prompting accusations of ‘debt diplomacy.’ 

According to the Council on Foreign Relations’ China Overseas Ports Tracker, as of August 2024, Chinese private and public actors have invested in 129 port projects worldwide, 17 of which reached majority ownership. As shown in Figure 2, a significant portion of ports with majority Chinese ownership (outside of China) are located in Europe.

This fact has drawn concern from the EU and several Member States. A 2023 European Parliament report, ‘Chinese strategic interests in European ports’, emphasises the potential risk of strategic dependence on China and its impact on EU economic interests. Another report by the Netherlands Institute of International Relations examines the trajectory of Chinese influence in the Dutch logistics sector, highlighting the country’s central role in maritime trade and strategic autonomy.

In each case, the threat of ‘strategic dependencies’ has become a rallying call to action, often in opposition to a desired ‘strategic autonomy’. Yet, the nature and form of the potential ‘dependence’ is often ill-defined. Concerns focus on the potential of political influence over three major port operators: COSCO Shipping, China Merchants Port Holdings, and Hutchison Port Holdings. The first two are state-owned enterprises (SOEs), business entities at least partially owned by a government, while the third has previously experienced political intervention. 

Here, the concern is that the Chinese government might leverage these for-profit corporations to gather sensitive data and influence the flow of goods. Both reports directly reference the possibility of port operators tracking NATO arms transfers to Ukraine, which is especially problematic given Beijing’s at times tacit and at others explicit support for the Kremlin. Indirectly, the European Parliament report suggests that the greater a country benefits from Chinese port operations, the more it relies on maintaining good relations with China. 

In practice, however, such concerns often conflate the symbolic sensitivity of ports with their actual suitability as tools of coercion.

The Dangers of Autonomy

While monitoring foreign operators and creating anti-coercion instruments are sensible measures to protect critical infrastructure, there is also a risk of overreaction. Larger measures to secure autonomy, such as, in this case, overly strict FDI screening on port investments, could be unnecessary or counterproductive for three reasons: 1) Any Chinese attempt to exert political leverage directly over foreign critical infrastructure like a port would severely damage China’s reputation internationally, 2) focusing exclusively on Chinese FDI ignores the reality that Beijing has other, stronger avenues for leverage, as well as 3) Chinese investment has supported and continues to engender economic growth at a time when many European economies are stagnating.

For the first point, while the impact of coercive interference in port operations could be significant, the likelihood of such behaviour remains low given the reputational, commercial, and diplomatic costs it would impose on Chinese firms and the state itself. For example, COSCO could theoretically manipulate container flows via the Port of Piraeus, but doing so would be costly, damaging its reputation with foreign governments and affecting all present and future deals.

An example of this dynamic is Beijing’s recent rollout of an aggressive critical mineral export control regime during the US-China trade war. The regime, due to its potential to restrict the entire critical mineral supply chain, was met with global backlash and soon rescinded, but not before prompting an ongoing search for diversified sources.

The critical minerals case also elucidates the second point: that numerous, far more dangerous potential avenues of Chinese leverage exist. More practical tools include sanctions, export controls, tariffs, and trade manipulation. The critical mineral episode highlights that China’s most effective forms of leverage tend to operate at the level of upstream supply chains and regulatory chokepoints, rather than at individual infrastructure nodes such as ports. 

What is important is not to focus on entirely removing one’s exposure to potential leverage, but ensuring proper domestic capacity to respond to such leverage, such as the already existing anti-coercion instruments. Economic openness always involves potential dependencies, but, at the same time, investment is essential for growth. The question is whether the upsides of Chinese FDI in port infrastructure are worth the potential risks.

And, as for the third point, recent research indicates that the influx of Chinese port investments has contributed to local and regional economic growth. While outcomes may be uneven and are contingent on local governance, the overall trend suggests that port investments can generate spillover effects beyond bilateral trade with China. One report, chronicling an attempt by COSCO to purchase shares in a terminal in the port of Hamburg, found that, despite EU-wide criticism, the deal proceeded as city- and state-wide authorities considered it a ‘welcome contribution into the local economy’. 

According to another study, aptly titled Critical infrastructure, critical trade-offs, the authors found that European ports with Chinese investments increased container shipments with both China and other countries. Rather than creating dependencies, they found these investments have shifted economic hierarchies, rebalancing shipping activity towards Mediterranean and Atlantic ports and enabling them to become transshipment and gateway hubs. FDI controls, then, disproportionately affect Southern European economies while benefiting the established giants of the Northern European ports.

In total, not only is overt Chinese political influence on port operation unlikely given the costs compared to Beijing’s stronger avenues of leverage, but excessive investment restrictions would also deprive Member States of sorely needed economic growth.

Conclusion

In a purely political world in which measures to reduce ‘strategic dependencies’ were the highest priority, stricter FDI screening and autarkic practices might dominate. Yet, reality is much more complicated. Much of the European Union, particularly the traditional powerbrokers of Germany and France, is experiencing economic stagnation, while overhanging public debt limits fiscal capacity to modernise and accelerate growth.

In this context, European institutions must weigh the trade-off between strategic autonomy and economic growth. Measures that stimulate growth, such as external financing, joint ventures, and deeper integration into global logistics networks, may constrain certain aspects of strategic autonomy, yet they can simultaneously enhance Europe’s strategic security by sustaining economic vitality.

This is not to belittle the potential risks of interdependence, but instead to advocate for effective and directed strategies to ensure policies meant to protect the EU do not hamstring it. The Nexperia episode shows that strong corporate governance rules can protect from the potential political risks of foreign FDI and ownership.

Analysts often focus on perceived risks. When a state is labelled as one’s ‘strategic rival’ or ‘pacing threat’, analysis naturally gravitates to war-gaming the worst that state could do, and how to prevent it. The line between promoting general readiness and entrenching an incumbent’s advantage is thin, however.

Instead, analysts should ask: What are the continent’s most important dependencies, without which future autonomy and relevance are impossible? For the European Union, the pursuit of strategic security, rather than an absolutist notion of autonomy, requires safeguarding political resilience while ensuring the economic prosperity on which future relevance ultimately depends.

The views expressed in this article belong to the author(s) alone and do not necessarily reflect those of European Guanxi.

ABOUT THE AUTHOR

Austin Nellessen is a graduate from Georgetown University, where he focused on the intersection of international affairs, politics, and history, as well as US-China relations. A commentator on current international affairs on Substack, he is also the Director of ATLAS, a publication he founded to platform innovative ideas and challenge traditional thinking. Alongside professional experience using his Chinese language proficiency to conduct research at the Hudson Institute on Chinese domestic and foreign policy, he currently is Chief of Staff and Program Manager for M+D Advisors, a consultancy organizing the world’s biggest conferences.

This article was edited by Isabell Raue and Camilla Penserini

Featured Image: Cargo Ships in Port in Hamburg, Germany / Free for use / Wolfgang Weiser / Pexels