China’s Global Port Takeover Sparks Alarming International Fears – What’s Next?

The Chinese government has made substantial investments in constructing ports and other maritime infrastructure across the globe. As the world’s largest exporter, China has become a dominant player in the shipping industry, with private Chinese companies taking on key roles in port management and shipping operations. This growing influence allows China to have considerable control over the flow of goods worldwide, as well as the ability to monitor the activities of other nations from strategically positioned locations.

Brian Hughes, a spokesperson for the Trump-Vance transition team, expressed concerns that Chinese control over key maritime routes such as the Panama Canal presents a significant national security threat to the United States. He referenced statements made by General Laura J. Richardson, the head of U.S. Southern Command, who testified before Congress that Chinese investments in infrastructure could potentially serve as “points of future multi-domain access” for China’s military. This suggests that China’s presence in critical global shipping routes might offer them strategic leverage for military purposes, in addition to economic influence.

The Panama Canal, originally constructed by the United States in the early 20th century, was transferred to the Panamanian government in 1999 as part of an agreement brokered by President Jimmy Carter. This decision, however, has long been contentious, particularly among some Republicans, including President Ronald Reagan, who viewed the transfer of control as a misstep. The canal’s strategic importance has made it a point of debate in U.S. foreign policy, especially as global geopolitical tensions rise and concerns about China’s growing influence continue to intensify.

In recent years, U.S. officials have expressed growing concern about two strategic seaports located at opposite ends of the Panama Canal, a vital waterway that handles 40 percent of U.S. container traffic. These seaports have been operated for decades by Hutchison Ports PPC, a subsidiary of CK Hutchison Holdings, a conglomerate based in Hong Kong. While CK Hutchison is a publicly traded company whose largest shareholder is a family of Hong Kong billionaires, rather than the Chinese government itself, the situation is complicated by China’s increasing influence over Hong Kong. Since Beijing has extended its national security laws to Hong Kong, many U.S. officials are wary of the potential for Chinese interference in private companies, especially in sensitive global trade routes.

This concern has been amplified by recent developments where the Chinese government has demonstrated a readiness to leverage supply chains as a strategic tool. Beijing has accused the United States of weaponizing supply chains, and in turn, there are fears that China could use similar tactics in a potential conflict. U.S. lawmakers, both Republicans and Democrats, are particularly worried that in times of geopolitical tension or war, the Chinese government could pressure or influence private companies, like those controlling the Panamanian ports, to disrupt or delay critical shipments—whether commercial goods or military supplies—especially if tensions over issues such as Taiwan escalate.

This issue was brought to the forefront during a congressional hearing in May, where Representative Raja Krishnamoorthi of Illinois, a Democratic member of the House Select Committee on China, questioned an expert about the possibility of Chinese control over Panamanian ports. He raised concerns that in a worst-case scenario, such as a conflict involving Taiwan, China could manipulate the operations of these ports to obstruct U.S. shipments, undermining U.S. military and commercial readiness. This scenario reflects broader fears about China’s growing influence over global trade infrastructure and its potential use of that power for strategic purposes.

Daniel Runde, a senior vice president at the Center for Strategic and International Studies, a prominent Washington-based think tank, expressed agreement with the concerns raised about Chinese influence over key global trade routes. He acknowledged that while the government of Panama officially controls the entire Panama Canal, he believes that, ideally, companies linked to Hong Kong, such as those controlled by CK Hutchison, should not be in charge of the ports located at either end of the canal. Runde’s comments highlight the growing unease about China’s indirect influence in strategically important locations through corporate affiliations.

A recent analysis by Strategy Risks, an analytics firm, found no direct evidence linking CK Hutchison to the Chinese Communist Party specifically in the context of its operations at Panama Canal ports. However, the report pointed out that CK Hutchison’s ties to its Hong Kong-based parent company raise significant security concerns. As a Hong Kong-based entity, CK Hutchison is subject to Chinese jurisdiction, including laws that could compel companies to assist in intelligence gathering or support military operations if requested by the Chinese government. The report further highlighted that CK Hutchison has collaborated with various Chinese state-backed organizations on different business ventures, reinforcing concerns about its potential connections to Chinese state interests.

Corporate records accessed through Wirescreen, a data platform, revealed that CK Hutchison has a network of subsidiaries that co-own a real estate joint venture with the Aviation Industry Corporation of China (AVIC), one of China’s largest defense contractors. This connection raises additional questions about the nature of CK Hutchison’s business dealings and its possible alignment with Chinese strategic objectives.

Despite these concerns, neither CK Hutchison nor its subsidiary, Hutchison Ports, responded to requests for comments on the matter. It’s important to note that the presence of Chinese companies near strategic ports is not an isolated issue. CK Hutchison is one of the world’s largest port operators, managing 53 ports across 24 countries, including the Netherlands, the United Kingdom, Hong Kong, and Australia. This extensive global network further underscores the potential influence of Chinese-linked entities in global maritime trade and the growing concerns regarding national security risks associated with these business operations.

Michael R. Wessel, a former member of the U.S.-China Economic and Security Review Commission, a government body tasked with analyzing economic and security issues related to China, emphasized the critical importance of control over global ports for several key reasons. He explained that influence over port operations is not only a matter of economic dominance but also carries significant political ramifications. In addition to the ability to control the flow of goods, such influence could also enable the potential for surveillance activities. This capability could be leveraged for strategic purposes, allowing entities to monitor and gather intelligence on international shipping movements, which could have implications for national security. Wessel’s comments highlight the broader concerns about the strategic value of ports beyond simple trade and logistics, raising alarms about the security risks posed by foreign control or influence over such vital infrastructure.

Michael R. Wessel explained that 90% of U.S. military cargo is transported via commercial ships, which gives port operators a unique insight into when the U.S. government increases its military operations in specific regions. He also pointed out that owning or operating a port can offer valuable information about how the U.S. screens cargo for security risks, potentially making it easier to bypass these security measures.

Wessel added, “Being in control of a port or terminal gives you access to sensitive information about what the U.S. government is specifically looking for, as well as which containers may be singled out for additional inspection.” This kind of access could provide an advantage for anyone seeking to exploit vulnerabilities in the screening process.

In February, the Biden administration launched an initiative to enhance cybersecurity at U.S. ports and to support the domestic production of cargo-handling cranes, which have increasingly been manufactured by Chinese companies. Then, in July, U.S. lawmakers introduced a bill requiring the Department of Defense to track China’s growing influence over port operations.

Last year, the U.S. government issued an advisory warning port operators about the potential risks posed by foreign-made port equipment and software, which could create vulnerabilities in transportation networks. The advisory specifically noted concerns about Chinese-made security devices used for explosion detection and facial recognition, as well as ship-to-shore cranes that can be remotely controlled, highlighting the security threats these technologies could pose.

Panama’s increasing openness to China in recent years has heightened concerns in the U.S. about Beijing’s expanding influence. In 2017, Panama severed diplomatic ties with Taiwan and formally recognized Beijing as the legitimate government of China. The following year, Panama became the first country in Latin America to join China’s ambitious global infrastructure project, the Belt and Road Initiative.

However, since then, there has been growing unease within Panama about the rising influx of Chinese trade and investment, according to Jason Marczak, a Latin America expert at the Atlantic Council, a Washington-based think tank. This shift has sparked concerns in both Panama and the United States about the long-term implications of China’s increasing presence in the region.