China’s state-owned industries have been on a shopping spree of late, buying up infrastructure and resources such as ports, mines, farmland and technology firms to the point that some governments are beginning to reconsider the purchases amid national security concerns.
One example is China’s recent attempt to purchase 100 percent of the Kidman Ranch in Australia. The ranch is the country’s largest, and it comprises 2 percent of the all the continent’s farmland. The ranch’s land mass is equal to the size of South Carolina; the Australian government rejected the sale and subsequent offers of 80 percent and below. The government finally approved the sale of 30 percent of the ranch. [source]
Meanwhile, as part of Beijing’s trillion-dollar “Belt and Road Initiative,” major Chinese corporations like the state-owned Cosco Shipping Ports and China Merchants Port Holdings have been buying ports from Singapore to the North Sea and now Europe, after the recent purchase of Belgium’s second-biggest port terminal in Zeebrugge. That port acquisition was followed by others in Spain, Italy, and Greece in recent years:
The ports underpin the maritime half of the Belt and Road Initiative, snaking from the South China Sea across the Indian Ocean, through the Suez Canal and into the soft underbelly of Europe. The port deals are one of the clearest manifestations of Beijing’s ambitious plans to physically link China to Europe by sea, road, rail, and pipeline.
Other large Chinese cargo shipping firms have been acquiring ports in Sri Lanka, Djibouti, and Brazil. And for Europe Chinese investment hasn’t been limited to ports: Chinese companies are also investing heavily in the European energy business and high-tech sectors, which has also begun to unnerve some European leaders.
“For somebody like Cosco, the deals make sense financially, and they can make their lords and masters in Beijing happy because it fits the Belt and Road narrative,” said Neil Davidson, a senior analyst for ports and terminals at Drewry, the maritime consultancy. “At bottom, there is a geopolitical underpinning to a lot of this.” [source]
(Analysis: For now, just about the only major power attempting to slow down Chinese purchases of major infrastructure technology companies is the United States. Last fall President Trump blocked a Chinese company from acquiring Lattice Semiconductor via a Chinese-backed Canyon Bridge Capital Partners, and there has been subsequent discussion within U.S. industry and on Capitol Hill about how and whether more restrictions on Chinese purchases of key American companies should occur. But other Western nations, especially those in Europe, have, to date, been a lot less restrictive of their domestic firms.
Besides giving Beijing a strategic advantage, the acquisition of tangible country assets like ports, productive farmland and technology also gives China influence politically and externally in countries throughout the West — influence that is only growing with each new purchase. A big part of Chinese economic expansionism, also, is acquiring better technologies and manufacturing processes to enhance the country’s own industrial and manufacturing base.
Countries that becoming concerned they are losing vital infrastructure and influence are not being alarmist. They are correctly deducing that Beijing’s actions are not entirely altruistic but really aimed at acquiring greater economic power and geopolitical influence that it can wield to its advantage at a later date. — JD)