The 21st Century Maritime Silk Road: A Shift in Strategy
Port infrastructure development, as part of the Maritime Silk Road, is an innovation of the process of reform and opening up which began in 1980. In March, 1980, the CPC Central Committee and the State Council renamed Shenzhen, Zhuhai, Shantou, and Xiamen as Special Economic Zones. Building on this, in 1984, Dalian, Qinhuangdao, Tianjin, Yantai, Qingdao, Lianyungang, Nantong, Shanghai, Ningbo, Wenzhou, Fuzhou, Guangzhou, Zhanjiang, Beihai were approved by the State Council as the first batch of coastal cities opening to the outside world. This phase of opening up and reforms as a strategy was aimed at transferring manufacturing from coastal to inland regions. China’s economy transformed rapidly making it the second largest economy and the largest exporter of goods trade, when a challenge arose to its reform and opening up strategy in 2008 – the global financial crisis. Consumption in the US and Europe retarded since 2008 along with slowing growth of international trade. This trend forced China’s economy to enter a stage of high-medium speed growth from previous high-speed growth by 2017. Consequently, the pressure of sustaining economic growth has increased on China’s leadership and forced a need for a new round of reform and opening up.
This imperative was sought to be realized through BRI of which the maritime silk road initiative turned ‘outward’ in search of new opportunities to secure and sustain the much-needed growth momentum of China’s economy. Ports and port cities, hence constitute the building blocks of the maritime silk road as a subset of BRI, however, this time around, these ports and port cities will sprout along central regions of global economic growth in the 21st century – Central Asia, South Asia, West Asia, South East Asia, and Central and Eastern Europe, and other countries and regions, places with fastest growth in global trade and cross border investment (Silk Road Academy; 2017).
Image 2: Map of the Silk Roads - 2025
Source: China Discovery
In 2015, with the authorization of the State Council, the National Development and Reform Commission (NDRC), the Ministry of Foreign Affairs and the Ministry of Commerce jointly issued The Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road, which states, “The 21st-Century Maritime Silk Road is designed to go from China's coast to Europe through the South China Sea and the Indian Ocean in one route, and from China's coast through the South China Sea to the South Pacific in the other”. It further states that, “At sea, the Initiative will focus on jointly building smooth, secure and efficient transport routes connecting major sea ports along the Belt and Road”. This vision statement explicitly mentions 15 ports – Shanghai, Tianjin, Ningbo-Zhoushan, Guangzhou, Shenzhen, Zhanjiang, Shantou, Qingdao, Yantai, Fuzhou, Xiamen, Quanzhou, Haikou and Sanya – to act as ‘strategic fulcrum’, and remain at the forefront of opening up and reform.
Owing to its increasing commodity trade and increasingly intensive marine transport with countries along the BRI, China needs more secure and reliable ports outside China to be the fulcrum of its maritime logistic and also enable it to have more ‘non-military’ bases to provide security for China’s maritime transport, so as to meet China’s needs to ensure security of maritime trade and energy channel – establishment of safe trade corridors through non-traditional means. In order to build a smooth, safe and efficient transport route, establishment of an efficient and convenient port network or port group is undertaken through assigning specific missions to China’s coastal port city areas – The Bohai Port Group, Yangtze River Delta Port Group, and Pearl River Delta Port Group. Details of the projects undertaken by and linked to these three port groups forms a multi-dimensional matrix of – shipping routes, rail-road routes, port infrastructure, free-trade areas, construction of economic circles and industrial parks etc.
Table 1: Port Groups and Fulcrum Cities
Three Sea Port Groups – Maps [Source: www.researchgate.net]
Investment in port infrastructure outside China includes, Africa, North and South America, Mediterranean, Black Sea, Red Sea, South China Sea, and Indian Ocean. While much of the investments and contracts relate to the period following China’s accession to World Trade Organization in 2001, the earliest investment in port construction was in Friendship Port of Nouakchott, Mauritania in 1980 (North-West Africa).
China’s shippers, port operators and developers and financiers fall into three main categories – State Owned, CK Hutchison Holdings Limited (Hong Kong) and both. China’s state-owned enterprises own and operate a far greater number of ports than the Hong Kong-based and Panama-registered Hutchison Holding which on March 4 announced that it would sell its stakes in 43 ports across 23 countries to a US consortium led by BlackRock for US $22.8 billion amidst US-China rivalry despite maintaining a favorable balance sheet. According to Hong Kong based Ta Kung Pao, the US could use this transaction as a “template” to control more critical ports around the world and even implement suppressive measures through “long-arm jurisdiction”, leaving Chinese ships with “nowhere to dock”. The sale of two strategic ports in the Panama Canal is now facing anti-trust scrutiny as China interprets it as unpatriotic and betrayal. On 1 February, US Secretary of State Marco Rubio made his first official visit after taking office to Panama, and demanded that it withdraw from the BRI. A week later Panama officially pulled out of BRI. The Panama Canal is at the heart of US naval supremacy and was the result of a lesson learnt from the Russia-Japan naval war - Battle of Tsushima (1904).
China’s state-owned enterprises come under the State-owned Assets Supervision and Administration Commission (SASAC, 国务院国有资产监督管理委员会), which is itself directly under the supervision of the State Council, China’s cabinet. The Party Committee of SASAC performs the responsibilities mandated by the Central Committee of the Chinese Communist Party and is supervised directly by the vice-premier. Hence, it is expected to pursue non-commercial strategic goals as against multi-national corporations of the west. China’s global port network includes 110 ports in 67 countries, with an average operating contract of 35 years. This shift in strategy with an external orientation is now producing mixed results with increasing geo-political friction. Yet, China’s strategy has inbuilt flexibility and resilience and major scope for expansion. Unlike, the inward-looking strategy of opening up and reform where China could absolutely control the environment, this new round of reform is subject to influence by an external environment where China has little control. It is very likely that in the near future China will need to exert influence and control by deepening its political and strategic partnerships, and also deploy and employ its navy in pursuit of its goals. In 2015, China publicized its current naval strategy of “Near Seas Defense and Far Seas Protection,” which calls for the People’s Liberation Army Navy (PLAN) to expand the geographic and mission scope of its operations.
Chinese scholars have defended this strategy from the perspective of neoliberalism and neoclassical realism and argued against China’s quest for hegemony. While not yet close to achieving common prosperity, the strategy does not display a quest for hegemony from an economic, political, military and geo-strategic perspective. This may be true, for example, that China’s military outpost in Djibouti does not constitute a naval base, but just a place. Yet, what form and shape China’s aims and objectives takes is highly unpredictable. In China’s own admission this strategy is based on progress made on a step-by-step basis. According Barry Busan (2018), the BRI is an open basket, which over a period of time accumulates what’s required and discards what fails, it’s a grand-strategy with expanded notions of the temporal and spatial. No matter how slow, steadily, and cleverly China advertises its motives, from a geopolitical perspective the 21st century maritime silk road initiative is rooted in the ideas of Alfred Thayer Mahan, a naval historian who theorized the influence of sea power on history. Signs of early resistance to this strategy are now underway which seeks a response from China in coming months, if not years. China’s response will clarify the intent behind the strategy. So far, China’s port infrastructure has sprouted along the ‘choke-points’ – Malacca Strait, the Suez Canal, and the Panama Canal - central to maritime trade as well as maritime access.
The Flaw in Strategic Rationale
From a perspective of ports being the leader of the development of productive forces and social development of the city in which it is located, the fact that port cities require the support and contact of the market and economic elements in the direct and indirect hinterland underscores the flaw in China’s strategic rationale of port infrastructure and cities along the maritime silk route as a having only an economic basis. A developed industry, booming economy, character of the local population and governance, and other support infrastructure are a precondition for the success of port infrastructure. China’s strategic logic of port-first, which in time, influences the other necessary conditions for its success is the flaw in China’s strategic rationale. This flaw is now in full manifestation in Pakistan, Bangladesh and Sri Lanka, where the ports are limited to being just an expensive piece of infrastructure - hardware without the software to run it. It is this very flaw that has led to speculation about China’s strategic motives and triggered a response from others. To address this flaw in strategy, Chinese strategists bank on “time-lag” and expect the challenges to mitigate in long-term – the Shekou Model (Shekou Moshi). Hence, this strategy borrows from China’s traditional wisdom of ‘those who plant the seed will enjoy the shade’ - 前人栽树，后人乘凉. Although, China has projected the silk road as a project that benefits all and based on a win-win development model, China’s concerns, interest and centrality remains unconcealed. According to President Xi, “Any attempt to ... channel the waters in the ocean back into isolated lakes and creeks is simply not possible. Indeed, it runs counter to the historical trend”.
The strategic rationale is further imbedded in the historical concept of – worldwide shipping center. In early 20th century, US Secretary of State John Hay stated, “The Mediterranean is the Ocean of the past, the Atlantic is the Ocean of the present, and the Pacific is the Ocean of the future.” After London and New York, the international shipping center relocated to Tokyo with the rapid rise of economies in the Asia-Pacific region. Along with this, it is a historical fact that no economies in Asia have prospered without the west, especially in matters of trade and security as a precondition for economic prosperity, including China. The role and status of ports in shaping contemporary world history is significant, and a key feature of China’s interpretation of the past in terms of the ‘century of humiliation’. Up until the end of second world war, owing to the institutional innovation of capitalism which incorporated Asian countries into the world capitalist market system, this historical process led to European powers to force open East Asian countries and sign port treaties that laid the foundation for the ‘Treaty Port System’. This system of ports initially connected East Asia into a modern economic system and continues to be the dominant system in 21st century with innovations – World Trade Organization (WTO) and Trans-Pacific Partnership (TPP) etc. – dominated by the West.
The Belt and Road initiative in this regard while seeking similar objectives of trade liberalization and promoting open regional cooperation is a socialist system innovation. A prominent feature of the capitalist system created and dominated by the West is – discrimination and exclusivity. BRI as a socialist system innovation is characterized by openness and impartiality, which should be built jointly through consultation. This proposition is riddled in self-defeating proposals and deep contradiction. China’s execution of the projects planned under the BRI have come under fire for not being transparent, shrouded in secrecy and irrelevant to the political-economic situation of partner nations. For example, one important reason leading to the ouster of Imran Khan as the Prime Minister of Pakistan was his intention to review the terms of contract signed with China in executing projects planned under the China-Pakistan Economic Corridor (CPEC) – a 3,000-kilometer network of roads, railways and pipelines to transport oil and gas from southern Pakistan's Gwadar Port to Kashgar city, northwestern China's Xinjiang Uygur autonomous region. This economic corridor project was announced in May, 2013 with Premier Li Keqiang’s visit to Pakistan and was essentially a security project that accentuates the flaw in China’s strategic rationale. During this visit Premier Li stated, “In face of the profound and complex changes in the international and regional situation, the Chinese side is ready to join hands with the Pakistani side to cope with challenges for common development and to play a positive role in safeguarding regional stability and prosperity”. Yet another example is Venezuela, where economic instability has forced China to shift from a container terminal to oil terminal to facilitate debt repayment. While it is true that port infrastructure does increase trade by facilitating transportation and decreasing costs, it is not a sole determinant. The strength of the economy, based on government policy along with other important factors instead determines the profitability of investment in ports.
Another major flaw in strategy is that it is non-organic, and requires financial backing from China’s state which is now facing economic hardships. The maritime world order was built over centuries and as a process was dependent on factors which cannot be recreated in given times – for example, British system based on colonies, the American world order based on formal military alliances, and centrality of the use of military force. China’s approach which lacks clarity regarding the end state, is causing friction as it is given that China’s present policy formulation will undergo major transformations in the future. China which first labelled its rise as peaceful, is now seeking national rejuvenation.
Conclusion
Port Infrastructure and cities as the building block of the 21st century maritime silk road is at an early stage of its development and part of China’s grand strategy to link its domestic economy with that of the world, and integral to its strategic vision of the great rejuvenation of the Chinese nation. The challenges faced by China in terms of implementing its strategy in an environment less controlled by it will inform the next phase of its development. The foundations upon which China is pursuing this historical initiative is comprehensive and coming years will see transformations as China unveils the subsequent innovations to its policy of reform and opening up. While investment in port infrastructure is substantial (USD 46 billion), the associated development of a domestic environment that supports such ports in various countries requires more attention, resources and political alignment.
The success of this initiative is dependent on the overall geo-political climate which has come under severe stress and challenged China to pursue its plan. In 2023, global maritime trade grew by 2.4 per cent to 12.3 billion tons, rebounding from the 2022 contraction. The sector is projected to grow by 2 per cent in 2024 and an average of 2.4 per cent annually through 2029. Costly rerouting around Africa's Cape of Good Hope, given disruptions in key chokepoints like the Suez and Panama Canals and the Red Sea which face growing pressure from geopolitical tensions is just an episode of a turbulent geopolitical shift now underway. Under these circumstances, China will be forced to secure its interests and create its own sphere which remains unaffected and supports its national development. As China does this, it is likely to implement its own rules-based order – a socialist system of innovation. China’s domination of the shipping and maritime transport sector and its unprecedented investment in a world-class naval fleet will inevitably find a place in the subsequent innovation of its opening-up and reform in coming years. Yet, unlike many mainstream western analyses, there remains a chance for the US-led west and China to find mutually beneficial common ground at sea. With both the US and China adhering to Mahanian doctrine of sea power, a conflict can be avoided, but the problem is – the command of the sea cannot be shared.
This is Part 2 of the Issue Brief. Read Part 1 here.
Author
Dr Sundaram Rajasimman
Dr Sundaram Rajasimman lectures at Sichuan International Studies University, Chongqing, People’s Republic of China and is associated with Baize Institute for Strategic Studies (Southwest University of Political Science and Law, Chongqing). He holds a PhD from Jilin University (Changchun, PRC), M.Phil. from Center for East Asian Studies at Jawaharlal Nehru University (New Delhi), and Masters in Defense and Strategic Studies from Madras University (Chennai). He has held research appointments at Institute of Defence and Strategic Analysis (IDSA), Center for Air Power Studies (CAPS), and National Security Research Foundation (National Security Council, Government of India). He specializes in strategic culture, art and science of war, modern war history and political thought & philosophy. At present he is completing a book length work on Naval Power to be published by Lancer Publications in May, 2025.