• Invading Taiwan would be a logistical minefield for China | Special report
• The hidden power of China’s pandas — and why the U.S. is losing them all
• “The China Project“ media company shuts due to funding problem
• Senators urge US to take steps to boost battery production, citing China
• China ‘world’s biggest debt collector’ as poorer nations struggle with its loans
• China has acquired a global network of strategically vital ports

Invading Taiwan would be a logistical minefield for China | Special report

https://www.economist.com/special-report/2023/11/06/invading-taiwan-would-be-a-logistical-minefield-for-china

The beaches of the tiny island of Kinmen are still dotted with reminders of the PLA’s first attempt to invade Taiwan. Rusted anti-landing spikes jut from the shallows. Beyond the dunes lie anti-aircraft batteries and old houses pockmarked with bullet holes. Inland, a small museum displays rifles and tanks used in the battle that would haunt the PLA for decades—and lay the ground for the present-day stand-off between China and America.

On October 25th 1949 an advance force of 9,000 PLA troops attempted to land in what was meant to be a decisive strike against the Nationalist forces who had fled to Taiwan and nearby islands (including Kinmen) at the end of China’s civil war. They reached Kinmen at high tide. But when their wooden fishing boats turned back to get more men, they were skewered by barricades in the shallows as the tide went out. A brutal battle ensued. The PLA force pushed inland but by day three, it was out of food and bullets. Almost the entire force was either killed or captured.

Nearly 75 years later, China has many of the capabilities it needs to enforce its claim to Taiwan. It has missiles to pummel the island’s defences and to target any forces sent by America. China’s ships and aircraft far outnumber and outgun Taiwan’s. Recently the PLA has escalated operations in the area, staging mock island assaults, simulating blockades and probing air defences.

Even so, the logistics of an amphibious invasion are still daunting enough to give Mr Xi pause. For years, military planners on all sides have focused on whether the PLA has enough ships and aircraft to transport an invasion force across the Taiwan Strait in time to prevail before America intervenes. Possibly, some now think, if the PLA uses ferries, cargo ships and other civilian vessels too (something it has practised recently).

Sea of worries

In the last 18 months, however, fresh questions have arisen as the war in Ukraine exposed unexpected flaws in Russia’s military logistics. In China and elsewhere, logisticians are now examining whether the PLA could provide the fuel, food, ammunition, medical services and other critical support it needs to sustain an invasion that could last weeks, if not months.

“This is their soft spot,” says Admiral Lee Hsi-min, who until 2019 was chief of the general staff of Taiwan’s armed forces. “If Taiwan doesn’t surrender, once you’ve landed, you still have to fight for a period of time, maybe one week or two weeks or whatever. Where are your logistics? Your logistics support needs to come in across the Strait but ours don’t have to. We fight in our own yard.”

The numbers involved would be staggering: One PLA study estimated that 3,000 military trains, 1m vehicles, 2,100 aircraft, and more than 8,000 ships would be needed to transport troops, equipment and supplies. Another suggested that a landing would need more than 30m tonnes of materiel. That is significantly more ships, vehicles and supplies than America and its allies used in the D-Day landings in June 1944.

PLA experts have spent years analysing the D-Day landings, as well as amphibious assaults in the Korean and Falklands wars. Ukraine is less relevant in some ways, as Russia invaded mostly by land and Taiwanese forces could not be easily supplied by sea in wartime. Chinese defence experts are nonetheless scrutinising Ukrainian and Russian logistics for lessons.

The deficiencies of Russian military logistics and supplies “deserve our close attention” especially in regard to future sea crossings and island seizures, a Chinese defence-industry journal said in October 2022. It called for bigger stockpiles of military supplies. “Modern warfare consumes a staggering amount of materiel, especially in a protracted war of attrition…The side that runs out of ammunition and provisions is bound to be the loser.”

The quickening pace of combat operations is making it ever harder to deliver ammunition and other supplies to the front, the PLA Daily said in February. In future wars combat troops would be spread over bigger areas, making logistics even more complicated. The military mouthpiece said that current “logistics transportation capabilities” are not strong enough to meet the demands of “modern warfare conditions”.

Mr Xi has been trying to upgrade PLA logistics for some time. Before 2016 each of its seven military regions controlled its own logistics, fostering inefficiency and corruption. One scalp in Mr Xi’s corruption crackdown was Lieutenant-General Gu Junshan, a longtime PLA logistician. When investigators raided his villa (built in the style of the Forbidden City) they seized riches including three solid-gold items: a basin, a model ship and a bust of Mao.

Mr Xi replaced the military regions with five regional theatre commands, and created a Joint Logistics Support Force (JLSF) under the direct control of the Central Military Commission, which he heads. He also ordered the PLA to make better use of digital tech in managing logistics, and to work closely with the huge civilian logistics industry that serves China’s online shoppers.

Some of China’s biggest delivery companies, including SF Express and JD Logistics, have since signed agreements with the PLA to provide services such as warehouse management and goods transportation. Some have joined exercises to practise delivering military supplies by aerial drone to remote bases during wartime.

Testing positive

The first big test of the new system came at the start of the covid-19 pandemic, which began in the central Chinese city of Wuhan in December 2019. That is also where the JLSF has its base. The city of 11m people was thrown into chaos when it was suddenly subjected to a severe lockdown in January 2020. But over the next two months the JLSF pulled off a major relief effort, sending in doctors, nurses, vehicles, medicine, food and protective clothing.

Managing a similar feat during a war would be far harder, with command centres and supply lines under attack, front-line units competing for logistical support and civilian firms struggling to maintain operations under fire.

American and Taiwanese researchers who have studied PLA logistics think they have identified some weaknesses. They include a shortage of heavy-equipment transporters, over-reliance on roads and railways (which can be easily targeted) and small numbers of logistics personnel assigned to combat units, according to Joshua Arostegui and J.R. Sessions, two Pentagon analysts.

Having centralised military logistics since 2016, the PLA would also have to move much more materiel to front-line units in the run-up to an invasion, potentially tipping its hand. It is unclear if there is sufficient storage and other logistics infrastructure for that materiel in urban areas along the coast opposite Taiwan, says Chieh Chung of Taiwan’s National Policy Foundation think-tank.

The PLA air force might struggle to sustain combat operations longer than two weeks, says Lonnie Henley, a China specialist at America’s Defence Intelligence Agency until 2019. He doubts that it has sufficient maintenance capacity, spare engines or fully-trained pilots, noting that its biggest exercises usually involve about 200 sorties over five days. A major American air campaign entails 1,000 to 1,500 sorties per day over several weeks.

Mr Xi and senior PLA commanders have recently acknowledged that improvements are needed. At a military-logistics conference in 2021, General Zhang Youxia, a vice-chairman of the Central Military Commission, spoke of the need to address “shortcomings and weaknesses”. In October 2022, the defence ministry denounced “peace paralysis” among logistics personnel who had prioritised “daily life” over combat readiness.

Taiwan is not the only logistical challenge. There is potential for instability on China’s land borders, too, including the disputed frontier with India, site of deadly clashes in 2020. “Our biggest challenge is versatility,” says Senior Colonel Zhao Xiaozhuo of the PLA Academy of Military Science. “Operating around Taiwan is not the same as in other areas, like the Tibetan plateau.”

And that is before one considers operations further beyond China’s borders. The PLA has had one foreign base, in Djibouti, since 2017 and has been trying to establish others in Africa, the Middle East and the Pacific. Chinese firms operate several foreign ports that could be useful naval stopovers. But China is a long way from establishing the kind of network of substantial foreign bases that it would need to sustain major overseas operations.

Mr Xi’s ambitions for the PLA are clear. For now, though, China remains a regional military power. And as this special report has argued, despite huge advances in many areas, it still does not have the troops, equipment, experience, command structures or logistics necessary to be confident of victory in a war over Taiwan.

Back in 2013, Mr Xi said: “What I think about most is this: when the party and the people need it, will our armed forces always adhere to the party’s absolute leadership, can they mobilise to fight and win, and will commanders at every level be able to lead their troops in battle?” A decade later, he is still looking for answers. ■

The hidden power of China’s pandas — and why the U.S. is losing them all

https://www.washingtonpost.com/history/2023/11/07/panda-diplomacy-china-us-zoo/2023-11-05T16:49:26.970Z

Sure, they’re cute and cuddly. But for more than 50 years, China’s giant pandas have also been powerfully strategic — a diplomatic tool methodically deployed to shore up alliances, woo new partners and build goodwill.

“Many people don’t realize it, but there are actually two Chinese ambassadors in Washington: me and the panda cub at the National Zoo,” said Cui Tiankai, China’s then-ambassador to the United States, in 2013, when a pink, wrinkly newborn arrived to widespread jubilation at the Smithsonian’s National Zoo.

So the imminent departure of all pandas from the United States feels ominous — a sign that this complicated relationship is shifting into a new era, fraught with tension that even the most adorable bear cannot overcome.

For decades, the black-and-white animals have endured in America. Even as U.S. politicians increasingly blamed China for stealing jobs and violating human rights. Even as U.S. leaders launched a trade war and accused China of triggering the global pandemic, and as anti-Asian hate crimes spiked across the country.

Through it all, pandas remained a sturdy cornerstone of U.S.-China relations.

The love affair began at a dinner party in 1972.

President Richard M. Nixon had just landed in Beijing, the first U.S. president to visit the People’s Republic of China. At stake was the future of the Cold War and America’s uncharted relations with China — a Communist nation and longtime adversary.

At their welcoming banquet, first lady Pat Nixon was seated next to Premier Zhou Enlai, China’s high-ranking leader, second only to Chairman Mao Zedong himself.

The first lady noticed on the table a small tin of cigarettes marked with the logo of two pandas.

“Aren’t they cute?” she said. “I love them.”

“I’ll give you some,” Zhou told the first lady.

“Cigarettes?” she replied.

“No,” Zhou said. “Pandas.”

Tens of thousands flocked to the Smithsonian’s National Zoo when the giant pandas promised by the Chinese premier arrived; tens of millions have visited since. They became not only the zoo’s star attraction, but also the unofficial mascots for the city of Washington, appearing on its Metro cards, on statues throughout the District, and on mugs, T-shirts and keychains along the National Mall.

But now, in a matter of days, the last three pandas at the National Zoo will enter transport crates and board a FedEx Boeing 777 headed for Chengdu, China. Already, pandas in San Diego and Memphis have made similar journeys in the past four years. The only pandas remaining in the United States will be four in Atlanta, scheduled to depart for China next year.

U.S. and Chinese officials have not commented overtly on the collapse of their panda diplomacy and what it says about the tattered state of the two countries’ relationship. Officially, China’s contracts lending pandas to U.S. zoos simply expired and weren’t renewed.

As a result, one question now weighs heavily on the hearts of diplomats, Sino-American experts and zoo-going children alike: When, if ever, will pandas return to America?

Why pandas?

As a Chinese national symbol, pandas are a relatively new development. The United States has long had the bald eagle, and Russia its bear. But before China’s Communist revolution in 1949, other animals were much more prominently used as cultural icons: dragon, phoenix, tiger, crane.

China’s new Communist leaders, however, violently rejected anything tied to the country’s imperial past. And pandas were a relatively blank canvas — as well as a powerfully appealing, non-threatening one — with which China could present itself to the world.

Russia and North Korea — fellow Communist states — were among the first in this era to receive living samples as diplomatic gifts.

Then, in 1972, came the United States and Japan — both former foes that China hoped to turn into trading and strategic partners (and ultimately succeeded).

The species at the time was so foreign to Americans that a Washington Post article in March 1972 included detailed explanations of what they looked like: “There is a black patch around each eye.”

On April 16, 1972, a male and a female — both 18 months old — arrived on a military plane at Maryland’s Andrews Air Force Base and were escorted by police to their new home at the Smithsonian zoo. (In exchange, Nixon sent two musk oxen to China, which were considerably less popular.)

The pandas became instant celebrities, gracing magazine covers and launching an entire economy of stuffed animals and toys. Their romantic misadventures and possible pregnancies were tracked with the breathless anticipation usually reserved for British royalty.

In the decades that followed, China became increasingly effective at harnessing the charisma of the bamboo-munching animal. Instead of outright gifts, its pandas became expensive loans, with China usually charging $500,000 a year per panda.

A 2013 Oxford University study revealed that the timing of China’s panda agreements with Canada, France and Australia coincided with uranium deals and contracts with those countries. Similarly, panda exchanges with neighbors like Singapore, Malaysia and Thailand correlated with signed free-trade agreements and deals. A 2021 study concluded that the number of pandas bestowed strongly corresponded with a country’s trade volume with China.

In recent years, panda recipients have included countries such as Finland, the Netherlands and Denmark. Last year, China sent its first pair to the Middle East — a strategic focus for its expanding global influence. Those pandas arrived in Qatar ahead of the World Cup, for which Chinese companies won major construction contracts.

One country that won’t fear losing its pandas any time soon: Russia.

During a 2019 visit with his proclaimed “best friend,” Chinese President Xi Jinping presented Russian President Vladimir Putin with two pandas on a 15-year loan.

“This is a gesture of particular respect and trust,” Putin said.

Bringing people together

But a true understanding of what the 51-year tenure of pandas in Washington has meant requires looking beyond the Cold War, the diplomatic strategy and loan negotiations — and at the adorable furballs themselves.

That’s what Frances Nguyen has done day after day, for hours at a time, over the past two decades.

A worker for the U.S. federal government, Nguyen remembers visiting the zoo with friends in 2005, shortly after the female panda Mei Xiang gave birth to Tai Shan — the first panda cub born at the National Zoo to survive more than a few days. Eventually, her friends moved on to see other animals, but Nguyen couldn’t take her eyes off the pair.

“My friends got annoyed, so I just started going by myself, which was weird,” she said. “To be a single adult lady sitting at the zoo for hours.”

Watching Mei Xiang tend to her newborn cub often brought Nguyen to tears. She would think of her own childhood in Vietnam, where she was left behind at age 3 by her parents, who fled to America amid the war by boat. The separation left Nguyen with a lifelong scar, even though she was reunited with her mother a few years later.

“When I watch her take care of her cubs, it’s like I’m watching what I missed out on in my own life,” Nguyen said.

The pandas taught her what it meant to love. She visited them on weekends, days off and vacations. She began a group called Pandas Unlimited for fans in Washington and beyond. The enthusiasts held silent auctions for the pandas, designed pins and organized fundraisers for the zoo.

For years, the pandas brought Nguyen joy, purpose and friends. They even gave her a mate and cute offspring of her own to raise. She met her now-husband, Foo Cheung, at the panda exhibit. They both came to the zoo for hours on weekends to photograph the pandas. He saw her struggling once with a telephoto lens in the rain and came back a few days later with a plastic cover custom-fit for her lens.

“That’s when I started developing feelings,” she said.

She cried for days in 2010 when Tai Shan — the cub she fell in love with — was sent back to China. According to the loan agreements, all cubs born abroad remain property of China.

“I learned that’s what happens with love,” Nguyen said. “When it’s deep, it hurts.”

By then, Nguyen was pregnant herself. For the next few years, she withdrew from the pandas, visiting less frequently — wary of having her heart broken again and focused on her own family.

But she has returned to her obsession in recent years, often taking her husband and two children with her. She takes as many as 1,500 photos a day and posts videos of her visits on her panda group’s YouTube channel.

Like many, she struggles to understand why the pandas are leaving and how much exactly it has to do with the souring U.S.-China relationship.

“Maybe it’s political, but regardless we have to honor the agreement we signed up for,” she said. “But my pitch to China to send pandas here again would be to look at how much joy and love and happiness these pandas have created since they arrived in the U.S.”

Nguyen pointed to her own life, straddling Vietnam and America, two countries riven by their own geopolitical tensions. The pandas healed those rifts in her and brought people together in ways nothing else could.

“Don’t we want to give that to the next generation?” she said.

Sending a message

The U.S.-China relationship is more complicated now than in those early days of the Nixons’ banquet in Beijing.

The frostiness has deepened in recent years, with each side increasingly suspicious of the other: a Chinese spy balloon shot down over America. Trade wars declared. Threats made over Taiwan. Consulates forced to close on both sides.

Amid those military and economic tensions, the fate of a handful of bears may seem insignificant. But that’s the beauty of panda diplomacy, experts say. It’s a way to send a message without sending a message.

“It’s a clever move by China to bring back the pandas. They can claim there’s nothing explicit in the action, but pandas are always political,” said E. Elena Songster, author of “Panda Nation: The Construction and Conservation of China’s Modern Icon.” “The difficulty is understanding exactly what the message is that’s being sent.”

Perhaps, some analysts say, it is simply a signal of present-day reality, a wake-up call for the strained U.S.-China relationship.

Earlier this year, a panda on loan to the Memphis zoo suddenly keeled over. Lele’s death sparked widespread anger and suspicion on Chinese social media that he had been mistreated by his American caretakers. A petition on Change.org alleged malnourishment and poor medical care.

Things got worse when photos circulated showing his surviving mate, Yaya, skinny and losing clumps of her hair because of a skin disease. Chinese users — egged on by nationalistic online pundits — campaigned for leaders to “bring home Yaya.” Even a delegation of Chinese scientists — sent to Memphis to conduct an autopsy on Lele and check on Yaya — was unable quell the uproar, and Yaya was soon returned to China.

The deepening acrimony goes the other way as well.

In recent weeks, Sen. John Fetterman (D-Pa.) has criticized China’s purchases of swaths of U.S. farmland. “I mean, they’re taking back our pandas,” he said. “You know, we should take back all their farmland.”

Last year, a Republican congresswoman from South Carolina introduced a bill intended to quash panda diplomacy by establishing a rival breeding program and ensuring that any cubs born in America become American.

“It’s high time the United States said ‘no’ to the Chinese Communist Party and its international propaganda campaign,” Rep. Nancy Mace declared of her bill, which ultimately failed. “Pandas born in the United States deserve to stay in our country.”

Looking to the future

As with any rocky relationship, it’s hard to tell exactly where things stand.

There are legitimate reasons for America’s pandas to return to China. Many are getting old and could benefit from specialized care. The National Zoo’s lease agreement expires Dec. 7; its pandas will leave in the coming days, well ahead of that date.

The zoo’s leaders have remained circumspect about their conversations with Chinese officials. They’ve made clear that they want more giant pandas, but neither side has revealed how serious or productive those conversations have been.

After investing decades and millions into its panda program, the Smithsonian plans to proceed with a $1.7 million renovation of its panda enclosure. It will include a new climbing structure, a big pool, and a smoke detection and evacuation system.

The plan is to have a beautiful new home ready for that day in the future when American and Chinese officials hopefully move past the fractious suspicions now consuming them both.

For that day when China and America can once again find common ground on that lowest common denominator of international diplomacy: the irresistible cuteness of pandas.

Michael Ruane contributed to this report.

“The China Project“ media company shuts due to funding problem

https://reuters.com/article/china-media/the-china-project-media-company-shuts-due-to-funding-problem-idUSKBN32207F

One of the few independently funded English-language publications to cover China in depth for Western audiences, "The China Project", is to close because of a lack of funding, its editor-in-chief, Jeremy Goldkorn, wrote in a post.

The China Project, which began as a newsletter in 2016 and was formerly known as SupChina, expanded to become a "news and business intelligence company focused on helping a global audience understand China", it says on its website.

Its products included the popular China news and society-themed Sinica podcast, articles on a wide range of China-themed topics on its website, a business intelligence data product "ChinaEDGE" and organising conferences.

Staff numbers increased too. But as with a number of online-based media companies in recent years, such as Buzzfeed News, financing became a problem.

"The media business is precarious," Goldkorn wrote in a statement on the website.

"This week, we learned that a source of funding that we had been counting on was no longer going to come through, and we have had to make the difficult decision to close down."

The company sought to produce "balanced" reporting on China and U.S.-China-themed topics. But this attracted criticism as relations between the two powers sank to new depths.

"We have been accused many times in both countries of working for nefarious purposes for the government of the other," Goldkorn said.

"Defending ourselves has incurred enormous legal costs, and, far worse, made it increasingly difficult for us to attract investors, advertisers, and sponsors. While our subscription offerings have been growing strongly and steadily, we are not yet in a position to rely on these revenues to sustain our operations."

Media companies globally have had mixed success with subscription models.

The China Project's subscription package offered "the internet's best birds-eye view of China" for $120 a year, which was still on offer to site visitors on Tuesday, according to a Reuters check.

"We do not have a business model problem," company CEO Bob Guterma told Reuters via email.

"We made big plans and pursued them boldly with the full backing of our investors. But in the past six months, investor interest has dropped off precipitously due to economic and geopolitical headwinds. We became unable to sustain what we had grown into."

Senators urge US to take steps to boost battery production, citing China

https://reuters.com/article/usa-china-batteries/senators-urge-us-to-take-steps-to-boost-battery-production-citing-china-idUSKBN3211UL

Two influential Democratic U.S. senators urged the Energy Department to take steps to boost U.S. battery manufacturing and next-generation battery research, citing China's dominance and export controls, according to a letter seen by Reuters.

Senate Intelligence Committee Chair Mark Warner and Energy Committee Chair Joe Manchin cited experts saying that the United States is "ten to twenty years behind Asia in commercialization of battery technology," and noted that China accounts for more than 75% of battery cell production.

"The U.S. must become a leader in manufacturing batteries and battery components, while securing our supply chains for the materials that make up those components," the senators wrote in a previously unreported letter seen by Reuters, citing China's decision last month to restrict exports of graphite, critical to manufacturing battery anodes.

China dominates the global EV battery supply chain including production of graphite - the single largest component.

The letter noted in 2022 the United States produced less than 10% of lithium-ion batteries in 2022 and said demand is expected to grow over seven times by 2035.

The letter wants a committee briefing by Dec. 1 "on ongoing research and development of next-generation battery technologies."

Lithium-ion batteries, the Pentagon has said, are crucial to thousands of military systems from "handheld radios, to unmanned submersibles and to future capabilities like lasers, directed energy weapons and hybrid electric tactical vehicles," the letter noted.

China accounts for 70% of the global production of lithium-ion batteries, the letter said, noting of five critical minerals required for most lithium-ion batteries, China "controls between 60-100% of the mining or refining for these minerals."

The letter also said "it is critical that the U.S. lead in next-generation battery technology and alternative chemistries" and coordinate with the Department of Defense and other national security agencies "to support procurement of innovative, U.S.-developed energy storage technologies."

A spokesperson for Energy Secretary Jennifer Granholm did not immediately respond to a request for comment.

China ‘world’s biggest debt collector’ as poorer nations struggle with its loans

https://www.theguardian.com/world/2023/nov/06/china-worlds-biggest-debt-collector-as-poorer-nations-struggle-with-its-loans

China has become the world’s biggest debt collector, as the money it is owed from developing countries has surged to between $1.1tn (£889bn) and $1.5tn, according to a new report. An estimated 80% of China’s overseas lending portfolio in the global south is now supporting countries in financial distress.

Since 2017, China has been the world’s biggest bilateral lender; its main development banks issued nearly $500bn between 2008 and 2021. While some of this predates the belt and road initiative (BRI), Beijing’s flagship development programme has mobilised much of the investment in developing countries.

But a new report by researchers at the AidData research lab at William & Mary, a public university in Virginia, found that China, the world’s second largest economy, is now navigating the role of international debt collector as well as being a bilateral funder of major infrastructure projects.

Lending from Chinese state-backed banks has helped to build railways in Kenya and power plants in Cambodia, along with thousands of other projects. The AidData researchers analysed 20,985 projects in 165 low- and middle-income countries, which were financed with grants and loans worth $1.34tn between 2000 and 2021.

The researchers found that as the debts to Chinese lenders have mounted, the number of suspended or cancelled projects has also increased. With a high share of lending directed towards countries in, or at risk of, financial distress, Beijing is now increasingly worried about the risk of defaults.

In June, Zambia reached a historic deal to restructure $6.3bn of debt, two-thirds of which is owed to the Export-Import Bank of China, one of the country’s two main policy banks.

To mitigate the risk of future defaults, Chinese policymakers have introduced a number of measures, including reducing loans for infrastructure projects while ramping up emergency lending. In 2015, infrastructure project lending accounted for more than 60% of China’s loan portfolio. By 2021, the share was just over 30%, with emergency lending accounting for nearly 60%.

“China is increasingly behaving like an international crisis manager,” the researchers concluded. China has created “a safety net” for countries in financial distress – “and, by extension, their highly exposed Chinese creditors”.

Another way in which Chinese lenders have been trying to lower their exposure to risk is by increasing the penalties for late repayments, a move that may alienate borrowers. The AidData report cites figures from the Gallup World Poll which shows that public approval ratings for China in low- and middle-income countries fell from 56% in 2019 to 40% in 2021.

The terms and conditions of specific Chinese loans are often not transparent, but economists estimate that Chinese government loans to low-income countries typically have a 2% interest rate compared with the 1.54% norm for the World Bank’s concessional loans. But the AidData researchers found that between the early years of the BRI (2014-2017) and the latter period (2018-2021), Chinese lenders increased the maximum penalty interest rate for late repayments from 3% to 8.7%.

Bradley Parks, one of the report’s authors and the executive director of AidData, said: “Beijing is trying to find its footing as the world’s largest official debt collector at a time when many of its biggest borrowers are illiquid or insolvent. And debt collectors don’t win a lot of popularity contests.”

Still, Parks noted, “China is not going to stand by and watch its flagship global infrastructure initiative crash and burn.” Beijing is currently on a “rescue mission” to minimise debt distress, but the government is also “playing the long game”, Parks said. “It is putting in place a set of loan repayment safeguards … that are designed to futureproof the belt and road initiative.”

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China has acquired a global network of strategically vital ports

https://www.washingtonpost.com/world/interactive/2023/china-ports-trade-military-navy/2023-09-18T14:14:31.586Z

A decade ago, Chinese President Xi Jinping launched the Maritime Silk Road, the oceanic component of his flagship Belt and Road Initiative aimed at improving China’s access to world markets by investing in transportation infrastructure. The initiative’s investments have since slowed as Chinese growth falters, the United States pushes back and countries question the indebtedness the projects brought.

But China has already secured a significant stake in a network of global ports that are central to world trade and freedom of navigation. Although the stated goal of the investments was commercial, the United States and its allies have grown increasingly concerned about the potential military implications.

Xi has frequently talked of his ambition to turn China into a “maritime superpower.” The port network offers a glimpse into the reach of those ambitions.

China’s ambitious sea route runs south from the coast of China through the major transit route of the Indian Ocean and the busiest maritime choke points of the Middle East, ending up in Europe.

When Xi announced his plan, China had stakes in 44 ports globally, providing a foundation for his strategy.

A decade later, China owns or operates ports and terminals at nearly 100 locations in over 50 countries, spanning every ocean and every continent. Many are located along some of the world’s most strategic waterways.

The majority of the investments have been made by companies owned by the Chinese government, effectively making Beijing and the Chinese Communist Party the biggest operator of the ports that lie at the heart of global supply chains.

The expansion is critical to China’s economic power and has significant military implications as well, analysts say. “This is not coincidental,” said Carol Evans, director of the Strategic Studies Institute of the U.S. Army War College. “I firmly believe there is a strategic aspect to the particular ports they’re targeting for investment.”

The stated aim of this maritime network is commercial: to enhance and streamline China’s access to worldwide markets. In 2018, China expanded its maritime footprint at the Khalifa port in the United Arab Emirates, an important connector between Asia, Africa, Europe and the Middle East. Chinese state-owned Cosco Shipping built a commercial container terminal at the port, which it now operates.

But the investments go beyond that. They give Beijing a window into the business dealings of competitors and could be used to help China defend its supply routes, spy on U.S. military movements and potentially engage U.S. shipping, according to analysts. Chinese-owned ports or terminals are already ports of call for Chinese warships, such as the flotilla that entered the Nigerian port of Lagos in July.

In late 2015, China acknowledged it was building a military base adjacent to the Chinese-operated port of Djibouti. The African base was officially opened in 2017, only six miles away from a U.S. military base in the country. Located at the narrow entrance to the Red Sea, Djibouti is on one of the busiest shipping lanes in the world, where about 10 percent of global oil exports and 20 percent of commercial goods pass through the narrow strait to and from the Suez Canal.

Beijing is decades away from matching the U.S. military presence worldwide, but China has the biggest and fastest-growing navy in the world, and increasingly it is venturing beyond the shores of eastern Asia.

From having no naval presence in the Indian Ocean two decades ago, for instance, China now maintains six to eight warships in the region at any given time, U.S. officials say.

A journey along the Maritime Silk Road illustrates some of the strategic advantages of China’s port investments.

Indian Ocean

A route for some major shipping lanes and global ports, the Indian Ocean was an early priority for China. About 80 percent of China’s trade crosses the ocean, including almost all of its oil. China’s port investments seem designed to protect the route. Beijing, for instance, has secured a 99-year lease at the port of Hambantota in Sri Lanka, giving it an important foothold on the busy shipping lane between Asia and the West.

Persian Gulf and Red Sea

China’s interest in these port locations goes beyond purely commercial concerns, U.S. officials say. Many are located at strategic chokepoints with high shipping traffic. At these locations, sea routes are narrow and ships are potentially vulnerable.

Strait of Hormuz

Leaked U.S. intelligence documents earlier this year suggested that China has revived an effort to establish military facilities at the United Arab Emirates port of Khalifa in the Persian Gulf, by the crucial Strait of Hormuz and just 50 miles away from an important U.S. military base.

Djibouti

China has already established one military facility adjoining a commercial port operation, in Djibouti, at the mouth of the Red Sea. U.S. officials say there are indications that it is scouting for more.

Suez Canal

Beijing has also been growing its influence in ports on Egypt’s Suez Canal, a vital human-built waterway that provides a shortcut from Asia to Europe. Earlier this year, Chinese shipping companies announced investments in terminals at the ports of Ain Sokhna and Alexandria.

Europe

China already controls or has major investments in more than 20 European ports, giving it significant sway over the continent’s supply routes. Many serve as vital logistics and transshipment points for NATO and the U.S. Navy. “It’s a significant national and economic security concern,” said Michael Wessel of the U.S.-China Economic and Security Review Commission.

Logink ports

One way in which China has secured a commanding position is through a little-known software system called Logink, a digital logistics platform owned by the Chinese government. It potentially gives China access to vast quantities of normally proprietary information on the movements, management and pricing of goods moving around the world. So far, at least 24 ports worldwide, including Rotterdam and Hamburg, have adopted the Logink system. The U.S. Transportation Department issued an advisory in August warning U.S. companies and agencies to avoid interacting with the system because of the risk of espionage and cyberattack.

The Americas

The original Maritime Silk Road, as laid out in Chinese documents, focused on three main routes. The plan has expanded to include the Atlantic and the Americas. Latin America is one of the fastest-growing destinations for Chinese port investments. China manages ports at both ends of the Panama Canal. It is building from scratch a $3 billion megaport at Chancay in Peru that will transform trade between China and Latin America, enabling the world’s largest shipping containers to dock on the continent for the first time.

The United States is still the world’s biggest military power, with about 750 bases overseas. China, with only one, is a long way from matching U.S. naval power, said Stephen Watts of the Rand Corp. “The implications of these far-flung bases have been overblown,” he said. “China would be easily overcome in these small outposts if it came to a shooting match.”

But China’s port network presents a different kind of challenge to U.S. security interests, separate from the threat of war, said Isaac Kardon of the Carnegie Endowment for International Peace. China is now the world’s premier commercial maritime power, and its strategic hold over the world’s supply routes could be used to interdict or restrict U.S. trade, troop movements and freedom of navigation in a range of different ways. “It’s an asymmetrical threat,” he said.

About this story

Story editing by Reem Akkad and Peter Finn. Project editing by Courtney Kan. Story by Liz Sly. Maps by Júlia Ledur. Design and development by Kat Rudell-Brooks and Yutao Chen. Charts by Cate Brown. Graphics editing by Samuel Granados. Design editing by Joe Moore. Photo editing by Jennifer Samuel. Copy editing by Vanessa Larson. Additional development by Dylan Moriarty.

Sources: Data on ports owned or operated by China is from Isaac B. Kardon’s and Wendy Leutert’s study “Pier Competitor: China’s Power Position in Global Ports,” International Security 2022; 46 (4): 9-47. Data on global ports and shipping traffic density is from the World Bank and the United Nations Code for Trade and Transport Locations (UN/LOCODE) global repository (as of July 2020). Satellite imagery is from Maxar Technologies. Shipping lanes are from the CIA’s Map of the World Oceans from October 2012, georeferenced and updated by the researcher Paul Benden. Rivers and bathymetry from Natural Earth.

Data on navy battle force ships is from the “China Naval Modernization” report by the Congressional Research Service from May. Data on Logink ports is from the report “LOGINK: Risks From China’s Promotion of a Global Logistics Management Platform,” by the U.S.-China Economic and Security Review Commission, from September 2022.