Ronald H. Linden
Europeans need to pay some attention to the costs of Chinese port investments as a part of their Maritime Silk Road.
Roughly three thousand years ago, the eastern Mediterranean was dominated by the Mycenaeans, Hittites and the Egyptian empire of Rameses III. Then, in several places at once, an aggressive people of mysterious origins referred to as “the sea peoples,” attacked the territories held by these empires. The invaders were defeated, but the reigning powers saw their dominance fatally weakened.
In today’s Mediterranean, the Chinese are the new “sea people.” Their attacks are not military in nature, and their ambitions are not territorial conquest. Rather, they aim to construct a seamless route for investing in and selling their goods to the dominant commercial region of today, Europe. Chinese State Owned Enterprises (SOE’s) are taking advantage of poorly performing economies (Italy) and antipathy toward the dominance of Europe (Greece, Turkey). China comes brandishing almost unlimited investment funds, and Beijing’s SOEs have set up shop from Valencia to the Bosporus and from the North Adriatic to the Suez Canal.
At the time of Barack Obama’s first inauguration, China’s share of global Overseas Foreign Direct Investment (OFDI) was a scant two percent. It stands now at more than eleven percent, second only to the United States. While the U.S. was long the preferred host for such investments, in three of the last five years Chinese FDI to Europe has exceeded that invested in America. Additionally, unlike most Chinese investment in Africa or much of Asia, Chinese interest in Europe lies in acquiring high-value manufacturing firms and their technology, along with key elements of their supply chains and, to burnish their reputation, the occasional high-profile soccer team (including both teams in Milan).