Global Port Competition Heats Up, World Worries About China's Dominance

The global competition to control ports is heating up. According to The Economist, from Europe to Asia, major countries are racing to expand their influence over sea trade routes. However, behind this wave of investment lies a major concern about China’s dominance in the global supply chain.

The Battle for Ports Begins in Greece

The Port of Piraeus in Greece is one of Europe’s busiest ports. China, through COSCO, has become the majority shareholder. This port handles more than 4 million containers per year.

However, this dominance is not being allowed without resistance. The United States is supporting the development of the port in Elefsina, while Russian and Chinese investors are entering the Port of Thessaloniki. On the other hand, NATO is building a logistics centre at the Port of Alexandroupolis.

This phenomenon is not occurring only in Greece. From the Panama Canal to Southeast Asia, ports are becoming a new arena for geopolitical influence struggles.

Why Are Ports Being Contested?

There are several reasons why major countries are vying for ports:

First, around 80% of world trade takes place via sea routes. This dependence makes ports and narrow passages like the Strait of Hormuz and the Strait of Malacca highly strategic.

Second, global crises from pandemics to energy conflicts have shown how vulnerable the world trade system is. Countries are now seeking to reduce dependence on these critical points, both for economic and geopolitical reasons.

The graph above shows the rising costs of port construction, reflecting a surge in global investment in the logistics sector.

Quoting The Economist, PwC states that total port infrastructure investment is projected to reach US$90 billion per year by 2035.

China Dominates the Global Port Network

China is now the most aggressive player in global port expansion. Chinese companies own or have invested in at least 129 ports abroad, with investments exceeding US$80 billion.

Many of these ports are located at strategic points such as the Strait of Malacca, the Strait of Hormuz, and the Suez Canal, which are vital trade routes for the world.

According to MERICS, a think-tank in Berlin, the presence of Chinese operators in ports can increase trade with China by more than 20%. However, exports to other countries could drop by up to 19%.

This shows that port control is not just about infrastructure, but a tool to direct trade flows.

China’s Dominance Goes Beyond Port Ownership

What makes China’s position even harder to challenge is its dominance that extends beyond mere port ownership. On the hardware side, Chinese companies produce more than 70% of the world’s container handling cranes, as well as 95% of the shipping containers used in global trade.

On the software side, the Chinese government operates LOGINK, a logistics management platform used in at least 24 countries and 86 ports.

This platform is connected to COSCO’s CargoSmart, which can track the movements of around 90% of container ships worldwide. The United States even banned the use of LOGINK in 2023 due to data security concerns.

This means that even if a port is not owned by China, its physical and digital infrastructure is likely still rooted in the Chinese ecosystem.

Western Countries’ Resistance and Supply Chain Fragmentation

Western countries and global companies are beginning to respond aggressively. Since 2021, non-Chinese investments in the maritime sector have reached around US$140 billion.

Companies like Hapag-Lloyd, AP Moller-Maersk, and CMA CGM are expanding their networks through acquisitions and port expansions.

The conflict at the Panama Canal is a real example of how ports are turning into a geopolitical battleground between the United States and China. The acquisition of port assets by Western investors has provoked a strong reaction from China, even affecting ship operations and global supply chains.

The Impact of Global Port Competition

Although it appears strategic, the surge in port construction carries significant risks. Many projects could be inefficient due to duplicated facilities and overcapacity.

Each country’s ambition to become a “global logistics hub” is also unrealistic. In the end, some projects could experience low returns, even harming taxpayers.

Additionally, political pressures could force shipping companies to use certain routes that are economically inefficient, increasing logistics costs and commodity prices.

In the short term, disruptions such as port congestion and surges in shipping rates will still occur. This means global consumers could face higher prices and delays in goods, even as port capacity increases.

However, on the other hand, the increasingly tight competition also brings positive impacts. Ports can no longer behave like monopolies and set tariffs at will. They are now driven to provide better services at more competitive prices to retain customers.