The Sri Lankan government, heavily indebted to China, recently agreed to lease approximately 80% of a strategic port in the southern part of the country to a state-owned Chinese company for $1.1 billion.
The port of Hambantota lies along an important trade route connecting Asia and the Middle East, and is a key part of Chinese President Xi Jinping’s “one belt, one road” plan to expand Chinese control over key shipping lanes.
China Merchant Port Holding Company, which purchased the lease to operate the port of Hambantota, is owned by the Communist Chinese government; specifically, it is owned via majority share by the China Merchants Group, a state-run corporation based in Hong Kong.
The same state-owned corporation maintains an 85% share over a large new terminal at the port of Sri Lanka’s capital, Colombo, as well as varying levels of control over ports in the African nations of Djibouti and Togo.
After acquiring 49% of Terminal Link, a portfolio of terminals run by struggling French container line CMA CGN, China Merchants Group gained access to the following ports: Antwerp and Zeebrugge in Belgium; Dunkirk, Le Havre, Montoir, and Fos in France; Casablanca and Tangiers in Morocco; Marsaxlokk in Malta; Abidjan in the Ivory Coast; Houston and Miami in the United States; Bussan in South Korea.
Another major state-owned corporation, COSCO Pacific, has minority control over the following ports: Antwerp, Suez in Egypt, and Singapore.
COSCO acquired a majority share (51%) of operations at the Greek port of Piraeus in April, 2016 (another 16% will be acquired after an agreed upon period of modernization lasting five years).
The Greek government was forced to sell control over the port, as well as control over 14 regional airports to a German-based company, in a desperate bid to satisfy EU creditors eager for repayment.
COSCO was at the center of controversy when the company sought to lease a former naval base at the Port of Long Beach, California after one of their ships was suspected of illegally trafficking firearms and was raided by customs officials in 1997.
President Bill Clinton was tied to the Chinese company that produced the firearms, Polytechnology, after a supporter escorted the company’s president, Wang Jun, into one of the President’s “White House coffees”, where he reportedly met with Clinton.
Clinton later said the meeting was ”inappropriate” and “an example of the failure of the White House to screen visitors rigorously.”
The cash-strapped (and corruption-plagued) government of the Australian Northern Territories leased control over port facilities in the capital city of Darwin to the Landbridge Company, a company closely connected to the Chinese government, for $361 million late last year.
The 99-year lease raised concern among some in the United States as Marines use the base to train approximately six months out of the year. In addition, fuel storage tanks used by the Marines are situated directly on the land leased to the Chinese company.
Critics argued that China’s port control “could facilitate intelligence collection on U.S. and Australian military forces stationed nearby,” according to the New York Times.
Ye Cheng, chairman and founder of the Landbridge Company, was honored as one of the top “10 individuals caring about the development of national defense” by the Shandong provincial government in 2013.
The Landbridge Company’s website notes their strong ties to “state-owned companies like China National Petroleum Corporation, which supplies oil to Landbridge and allows them to sell it at retail pumps under the corporation’s name.
Panama Ports Company, a subsidiary of Hutchison Ports, maintains exclusive rights to operate ports at both ends of the Panama Canal (Balboa on the Pacific Ocean, Cristóbal on the Atlantic Ocean).
Hutchison Ports is a subsidiary of CK Hutchison Holdings, chaired by Hong Kong-based billionaire Li Ka-shing. He has close ties to the Chinese government, as does the company’s co-managing director and deputy chairman, Victor Li Tzar-kuoi, who served on the Standing Committee of the 12th National Committee of the Chinese People’s Political Consultative Conference.
As of 2006, over 60% of the container terminals at the ten largest ports in the United States were operated by a foreign corporation, with the number rising to 80% at the largest ports in Los Angeles and New York/Newark.