December 16, 2024:
Chinese companies have been taking on the management of more foreign ports. This is the port management business and is an important capability for many nations that lack the cash and experience to make their port operations more efficient. China is not alone in this business. Persian Gulf states, especially the UAE, have long been in the business of managing port operations for many Asian and African nations. The UAE companies are reliable, wealthy and will rapidly upgrade ports where they are welcome.
Chinese efforts have become less popular because ports managed by Chinese companies, especially those in Central and South America, are increasingly used by the Chinese government-influenced firms to allow Chinese operators to set up espionage operations disguised as part of the Chinese port operations infrastructure.
Not only are so many Chinese managed ports being subverted for intelligence and corporate espionage, but most of the shipping using these ports are built in China by COSCO, a $600 billion a year business owned by the Chinese government, that operates dozens of tankers and container transports, as well as ship repair facilities and port operations around the world. It was always understood that COSCO would provide cover for Chinese spy operations, and any special operations the Chinese Navy needed help with.
China is often the major importer and exporters in ports it controls. That makes it easier for Chinese raw material exports to move without paying all the taxes due. The same game is played with tariffs imposed on imported goods. Chinese port officials can doctor the paperwork and bribe locals as needed to get their goods into a country as cheaply as possible.
Over the last few years it was found that COSCO was more into espionage than previously thought. As American counter-terrorism activities increased in out-of-the-way places, they often found that, not only was COSCO already there, but so were plenty of Chinese intelligence personnel, operating under the cover as COSCO employees. It was a near-perfect fit. Port operations are the center of much of what goes into, and comes out of, a country. In many poor countries, the local officials who oversee foreign operators like COSCO can be bribed to look the other way when special cargo goes in, or out. COSCO also moves sensitive people, and material, for the Chinese military or anyone else who can afford it.
It's never been a secret that COSCO works closely with Chinese military and intelligence agencies, but the degree of cooperation has been increasing. COSCO has also been caught smuggling illegal cargos like weapons, hazardous waste, and anything else someone can afford to have moved. In most non-United States or European ports the Chinese-run ports can do whatever they want without fear of competition from nosy and generally incorruptible American or European port inspectors.
The Chinese controlled ports provide a worldwide network of ports China can use to disrupt port operations in wartime. Even the United States could not quickly deal with the Chinese-controlled ports. Replacing personnel with trained locals or foreigners would take months and meanwhile Chinese port management firms could sabotage port operations as a last act before they were replaced by locals. The new port officials would require months of training, much of it on the job training as foreign training teams struggle to get ports functioning effectively.