The expansion of the Chinese government's power and influence in international shipping poses serious commercial and strategic risks to the West, whose dependence on Beijing has assumed an unacceptable dimension to the national security of individual states. In addition, by operating the world's largest maritime support system and infrastructure, the CCP can threaten the security of user data at any time and allow China to shape data governance norms in a manner contrary to the interests of Western states. Beijing, moreover, can use the "insights" it gathers to expand-and strike even more precisely-the weapon of economic coercion. Data aggregated through the platform, in fact, may allow China to block or disrupt trade flows to countries or entities in retaliation.
According to the Analysis Report on China's Port Operations 2024 published by the Institute of Transportation Planning and Research of China's Ministry of Transport, China's foreign trade volume through maritime transport accounted for 30.1 percent of global maritime transport in 2023, an increase of 2.2 percentage points from the previous year.
Eighty percent of international cargo movements are by sea.
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Driven by the recovery of demand for foreign trade and the restructuring of the global trade system, China’s foreign trade via marine shipping experienced rapid growth. In 2023, Chinese coastal ports handled 4.96 billion tons of foreign trade cargo, a year-on-year increase of 9.6 percent.
Containers, coal, metallic minerals, mineral building materials and petroleum make up the five major categories of cargo handled by Chinese coastal ports, accounting for 84 percent of the total throughput of all coastal ports in 2023. In particular, the throughput of imported coal and crude oil went through rapid growth, while that of imported iron ores remained at a high level.
While maintaining rapid growth, the structure of China’s foreign trade via marine shipping has continuously improved. In 2023, containers were responsible for transporting 23.3 percent of foreign trade cargo by sea in China, 0.2 percentage points higher from a year ago, maintaining steady growth year by year. Now, with the upgrading of customs clearance services at major Chinese coastal ports, exporters now find it easier to ship their cargo overseas via containers.
For instance, Yiwu Customs, east China’s Zhejiang province, has established a special window at Yiwu Port for the UEFA European Championship, offering targeted guidance to sports-related enterprises. It has enabled “one-click declaration,” allowing over 99 percent of export goods purchased via the market to be released by computer review almost instantly.
Besides, intelligent surveillance systems have been installed at the Yiwu West railway station, allowing for automatic container entry and inspection without the need for box opening.
At Ningbo-Zhoushan Port, Zhejiang province, Ningbo Customs has leveraged blockchain technology for authentication and traceability of bulk cargo, resulting in a significant boost in clearance efficiency. This has driven the loading efficiency of new energy vehicles to spike from 180 to 1,000 per day.
If maritime transport serves as the lifeblood of China’s foreign trade, ports are the vital nodes along these crucial pathways.
Rizhao city, east China’s Shandong province, boasts an extensive reach of rail transportation. One rail route starting from Rizhao Port stretches westward, entering Kazakhstan through Alashankou, northwest China’s Xinjiang Uygur autonomous region, then continuing through Russia, Belarus, Poland, and Germany before reaching the port of Rotterdam in the Netherlands – a journey spanning over 10,000 kilometers.
Recently, Rizhao Port has been approved to launch international multimodal transport services for transit goods, which means that cargo shipped to Rizhao Port from across the world by sea can be transported by rail to Mongolia, Russia, North Korea, Vietnam and Central Asian countries.
China’s major coastal ports are experiencing rapid growth in cargo throughput, with many ports seeing an annual growth rate of over 10 percent.
According to the Report, 23 Chinese coastal ports reported cargo throughput of over 200 million tons in 2023. Among them, Ningbo-Zhoushan Port took the lead with a throughput of 1.32 billion tons.
Behind this enormous throughput lie the continuously strengthened overall maritime support and infrastructure capabilities of China’s coastal ports. China has established the world’s largest maritime support and infrastructure system.
According to data released by China’s Ministry of Transport, from 2013 to 2023, the number of navigational marks along China’s coast increased by 68.8 percent to 20,600, all of which can be remotely monitored and controlled using the BeiDou Navigation Satellite System (BDS).
The advancement of charting services has resulted in comprehensive coverage of electronic charts along China’s coast, and these electronic charts can be published online and updated in real time. In 2023, 4.92 million copies of electronic coastal charts were issued in China.
Besides, China has established a coastal ground-based augmentation system enabled by the BDS, which consists of 23 BDS differential stations and 75 BDS continuously operating reference stations. The system provides centimeter-level high-precision navigation and positioning services.
Furthermore, China has built a maritime safety communications network, which serves as an integral part of the Global Maritime Distress and Safety System, offering communications services for maritime distress situations.
China is also actively promoting the development of 4G and 5G infrastructure and satellite communications applications, continuously enhancing the capabilities of satellite broadband data communications.
According to the Report, the cargo throughput of China’s coastal ports and the country’s foreign trade via marine shipping will continue to maintain steady growth. The total foreign trade cargo throughput of coastal ports in China is expected to reach around 5.1 billion tons this year, a year-on-year growth of about 3.2 percent.
Li Qing, deputy head of the China Waterborne Transport Research Institute under the Ministry of Transport, said that China will continue to accelerate the application of artificial intelligence, 5G, and big data technologies in the port and shipping industry, increase the port efficiency, promote the digital, intelligent, and green development of its coastal ports, and enhance the overall capabilities of ports.
What impact on trade and security interests?
China currently operates several trading ports in the Mediterranean and other parts of the world.
At the center of many Chinese overseas port projects is the Maritime Silk Road (MSR). Launched in 2013, it constitutes the seaborne component of the broader BRI. Indeed, China partly dominates the global maritime arena and the management of ports of global significance, so much so that there are Chinese investments in the 50 largest of them in the world (especially in Europe): think of Long Beach in California, Kaohsiung in southwestern Taiwan, Euromax in Rotterdam, Antwerp in Belgium, Hamburg in Germany, Piraeus in Greece, and Vado Ligure in Italy.
In 2015, the Israeli Ministry of Transport signed a memorandum of understanding with the Shanghai International Port Group (SIPG), granting the Chinese state-owned company the 25-year operation of the port of Haifa (2021 to 2046). The commercial port has been operational since September 1, 2021 and is under Chinese control.
Commercial risks
Aggregation of global trade data can provide an information advantage, enabling Chinese companies to compete unfairly.
A subsidy from the Chinese government and the Chinese LOGINK platform's partnership with Chinese companies, such as logistics service provider Cainiao, may undermine the growth of more innovative foreign companies in logistics technology.
Beijing, moreover, can use the collected "insights" to expand-and target even more precisely-the weapon of economic coercion. Data aggregated through the platform, in fact, may allow China to block or disrupt trade flows to countries or entities in retaliation for expressions of support for Taiwan, statements opposing China's crackdown on civil liberties in Hong Kong or the mass detention of Uighurs and other views contrary to the CCP playbook.
Strategic risks
Shipping information could provide Chinese military planners with trends and advance warning for logistics of foreign states using commercial transportation and ports to ship military equipment.
Chinese control over shipping information could also enable Chinese military planners to conceal PLA actions and disrupt foreign military operations. The PLA could have an impressive source of peacetime data as well as vulnerabilities to use to coerce or disrupt port operators during a crisis or conflict. In particular, the visibility of global shipping data acquired through Chinese digital platforms could enable the interdiction or disruption of foreign operations or actions, including sales of foreign military arms and munitions (e.g., to Ukraine or Taiwan), the movement of foreign military forces or their support in strategic, military, intelligence operations abroad. Beijing would also have the ability to disrupt supply lines. For example, it could reroute ships, giving docking priority to "favored" shipping companies, and reduce supplies/limit supplies in and out of a country. In extreme cases, data manipulation could be used to disrupt a country's strategic supplies or interrupt the transportation of sensitive and listed products through international customs.
Data security risks
Shipping data sharing platforms (such as Logink) could share data without users' permission, including confidential business data. Through the 2017 Intelligence Law-which requires any Chinese citizen or organization to "support, provide assistance and cooperate in the work of national intelligence"-Beijing could legally force the platform to share data it considers a matter of national intelligence. This law also places a general ban on disclosure of any support provided to Chinese intelligence services. Finally, since at least 2015, CCP Commissions have called for the inclusion of "classified interfaces," or backdoors, that could provide access to transportation, information, and communications infrastructure.
The increasing dominance of Chinese computing platforms in the international port system and related technical standards, then, may allow the Beijing government to pursue its restrictive approach to data governance. Its adoption in emerging economies, moreover, may foster greater reliance on China-based cloud computing services to provide digital infrastructure.
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