My new @ASPI_org Strategy Report with Raphael Veit has been released. We find that Chinese SOEs are taking a commanding position in global port operations, posing new risks to the world’s critical infrastructure. Thanks to @badiucao for the cover design! https://www.aspi.org.au/report/leaping-across-ocean-port-operators-behind-chinas-naval-expansion

Two of China’s most prominent companies in international maritime logistics are COSCO and China Merchants. Together, they operate 36 ports, many of which are located at crucial shipping nodes around the world. (Thanks to @Nrg8000 for the map!)

Both companies have deep connections to the CCP. Each company is required to have its own party committee and discipline inspection representative, which ensures company-wide adherence to the CCP’s strict disciplinary code.

What does this look like in practice? One in three COSCO employees is also a member the CCP, for instance. A member of COSCO’s party committee had previously served as a leading disciplinarian in both the Ministry of Public Security and the United Front Work Department.

China Merchants’ own party disciplinarian had previously served in the CCP General Office, which likely put her in close contact with two current members of the Politburo Standing Committee.

The CCP’s deep penetration into Chinese SOEs has notable military implications. COSCO operates its own militia that can likely conduct a variety maritime aviation missions. One of its joint ventures has taken tourists on a voyage to disputed islands in the South China Sea.

Under Chinese law, SOEs are required to assist with intelligence collection and national defence mobilisation. The CCP’s integration of its disciplinary apparatus into Chinese SOEs makes it highly unlikely that such a company will disobey a request to assist the CCP or PLA.

Australia and its like-minded partners can no longer afford to adopt a passive, reactive approach to China’s overseas port expansion. A more forward-leaning diplomatic posture is needed. Read our report for more: https://s3-ap-southeast-2.amazonaws.com/ad-aspi/2021-02/Leaping%20across%20the%20ocean.pdf?mrEJH8QwypEHHxT0jxjtml8ucEeiZJfz