Chinese Port Investments Face Western Scrutiny

China’s extensive network of overseas port investments is facing mounting political and legal resistance, as western governments intensify efforts to curb Beijing’s influence over strategic maritime infrastructure. Terminals spanning Panama, Europe and Australia have become focal points in a broader contest over foreign direct investment and economic security.

Under the Belt and Road Initiative, Chinese state-owned groups including Cosco and China Merchants Ports, alongside Hong Kong-based CK Hutchison, have secured operating contracts or infrastructure projects at 133 ports across 67 countries as of 2024, according to research by Merics and Aletheia Research Institution. For two decades, this expansion proceeded with limited scrutiny. Analysts now argue that period has ended, with institutional pushback reshaping the operating environment for Chinese-linked assets.

The most visible dispute concerns Panama, where CK Hutchison has operated two ports along the Panama Canal since 1997. In February, Panama’s president ordered the temporary transfer of control to Maersk and MSC after the Supreme Court annulled the company’s concessions, citing unconstitutional tax exemptions and privileges. The ruling followed an audit initiated shortly before Donald Trump’s return to the White House. A proposed $22.8bn acquisition of the ports and other assets by a BlackRock-led consortium remains stalled pending Beijing’s approval, with reports that China may seek Cosco’s participation as a condition.

In Europe, a draft EU Ports Strategy due for release in March urges stricter rules on foreign ownership and provisions enabling temporary state control on national security grounds. Chinese-linked entities hold stakes in around 30 EU terminals, including Piraeus, Rotterdam, Antwerp-Bruges and Hamburg. Previous pressure has already influenced investment outcomes, such as Croatia’s decision to award a Rijeka terminal concession to a European consortium despite a higher bid involving Cosco.

Australia has similarly faced diplomatic friction over efforts to return Darwin port to national ownership from Chinese-owned Landbridge. While China’s port network continues to make selective additions, including a $4.1bn contract in Kuwait, its expansion is increasingly shaped by legal challenges, regulatory intervention and geopolitical contestation that leave future transactions subject to heightened political risk.