From the Europoort – known as Rotterdam’s old port – it is another 19 kilometres on a two-lane road to the far end of the Maasvlakte, which protrudes into the sea like an extension of the mainland. Here, at the estuary of the river Meuse, some 30 thousand seagoing ships pass through every year.

On the way to this terminus, you can see the APM and Rotterdam World Gateway terminals on the right and then a harbour where the Pioneering Spirit is moored. The world’s largest operating vessel, owned by offshore company Allseas, was completed here; it can lift large platforms of 48,000 tonnes off the pedestal and transport them in one go.

The five major container terminals that have established themselves here are all owned by foreign companies

Everything about the Maasvlakte exudes Dutch glory. A modern port now lies where the North Sea used to be seventeen metres deep. It accommodates container terminals, distribution centres, storage tanks, offshore companies and an almost endless row of wind turbines. Nowhere else in Europe can the very largest containerships dock 24 hours per day for loading or unloading.

Conquering new territory from the sea: it’s as Dutch as it gets. But the five major container terminals that have established themselves here are all owned by foreign companies.

A shifting image

Together with ECT Delta, Rotterdam’s largest terminal, Chinese state-owned company Cosco acquired a 35 per cent stake in ECT Euromax in 2016 for more than 125 million euros. At the time, news coverage of this was limited to small, business-like snippets. Very different from the fuss that arose when Cosco recently wanted to acquire a 35 per cent stake in one of the four terminals at the port of Hamburg.

It’s all due to the shifting image in the West. For a long time, China watchers, entrepreneurs and policymakers thought that China would gradually become more democratic due to its ever-increasing prosperity and its growing middle class. That hope has diminished.

Reports of the detention and persecution of Uyghurs, dissidents and human rights activists, harsh censorship and mass surveillance, and increasing repression in the ‘special administrative region’ of Hong Kong have done the country’s image no favours.

There are also concerns in the West and Asia about the modernisation of China’s military, the threat to Taiwan in the East China Sea, and the militarisation of artificial islands and atolls in the South China Sea.

Over the past few years, the massive scale on which China is trying to obtain Western (business) secrets via hackers and spies has gradually become apparent. This is why the European Union labelled the country a ‘systemic rival’ in 2019.

Follow the Money recently found that Chinese investments in European ports increase the risk of espionage.

Grants and state aid

State-owned enterprises (SOEs) play a crucial role in China’s economy. They receive tax breaks, grants and cheap loans, allowing them to easily compete with European Union companies in the global market, where state aid is out of the question.

Maritime giant Cosco Shipping is a typical example of a state-owned company under the direct influence of the Chinese Communist Party (CCP). Between 2010 and 2018, it and other companies in the shipping sector received state aid worth 132 billion dollars.

In October, the US weekly Newsweek substantiated with internal Cosco documents that each ship has a CCP committee on board.

The port of Rotterdam is part of the Netherlands’ vital infrastructure, and any disruptions could significantly damage the economy and disrupt the import and export of goods. Recently, the National Coordinator for Security and Counterterrorism (NCTV) listed the handling of shipping (just like like aviation) in category B of vital processes.

According to previous investigations by Follow the Money in cooperation with RTL News, Cosco is not the only Chinese state-owned company operating in vital processes in the Netherlands.

Concerns about cargo scanners

Chinese (state-owned or private) companies are increasingly active within the logistics sector. To start with, in the port of Rotterdam.

At the Euromax Terminal in Rotterdam, the large container ships of Cosco and other shipping companies are unloaded with huge semi-automatic cranes. These belong to the Chinese state-owned company ZPMC (Port Equipment Crane Services), which established itself as a cooperative in Rotterdam in 2013.

There, containers pass through a customs cargo scanner. Chances are that this scanner was supplied by China’s Nuctech, which set up shop in Rotterdam in 2017. Customs is not allowed to disclose whether this is the case. ‘It is business-sensitive information,’ a spokesperson says.

In early 2021, the Minister of Justice and Security, Dilan Yesilgöz-Zegerius (VVD), and Dutch State Secretary for Finance, Helma Lodders (VVD), informed the House of Representatives that customs in the port of Rotterdam had seven large cargo scanners, four of which were supplied by Nuctech. There had been concerns among MPs following reports that sensitive import and export data could potentially leak to the Chinese government via the Nuctech scanners.

In the US, Canada and Lithuania, Chinese scanners are already banned because of potential espionage risks. According to the US Senate, Nuctech is indirectly linked to the PLA, China’s military.

Minister Yesilgöz and State Secretary Lodders informed the House that customs would conduct an audit into the security of the scanners. That investigation was completed in mid-2021. However, Customs claims that the results were classified as a state secret.

Smart acquisitions

About a quarter of containers arriving in Rotterdam come from China, sometimes in Cosco container ships. They are unloaded at a terminal partly owned by the same Cosco, with automatic cranes operated by a Chinese state-owned company, and possibly checked with Chinese scanners.

Containers are likely transported inland with companies that are also Chinese-owned. For instance, quite a few freight forwarders have been acquired in recent years.

For instance, the Venlo-based logistics provider KLG Europe. ‘That company was one of my favourites. They genuinely work smart. KLG specialises in efficient distribution through a convenient route planning system they developed themselves,’ says Bart Kuipers, a port economist at the Erasmus Centre for Urban, Port and Transport Economics (UPT). ‘You see the Chinese making smart acquisitions. And I find that cleverness more worrying than the number or size of acquisitions. KLG is a gem; the Chinese can learn a lot from them.’

KLG, a family-owned business based in Limburg, founded in 1918 by Cornelis Kuijken, was sold by his grandsons Kees and Ad because there was no successor. It was acquired in September 2019 by Sinotrans, the largest logistics provider in China. Its articles of association revealed that the company is under the Chinese Communist Party’s thumb (see box).

The acquisition of KLG Europe is no exception. Another example: in September 2021, Chinese logistics giant SF Holding announced that it was acquiring 51.8 per cent of the shares in Kerry Logistics, a large multinational freight forwarding company with a sizable operation in Hoofddorp and active in both the port of Rotterdam and Schiphol Airport.

Follow the Money found more Chinese companies and companies partly owned by Chinese companies in the logistics sector. Small ones, with less than 1 million euros in assets, are not included in the overview below:

This article began with a tour of the Maasvlakte, where all five major container terminals are foreign-owned. Less known is that, besides Cosco, there is a second Chinese state-owned company with a stake in container handling: China Merchants Port. Through a joint venture with French container giant CMA CGM, this company has held a 30 per cent shared stake in the state-of-the-art Rotterdam World Gateway terminal since 2020.

So, of the five largest terminals, there are two in which a Chinese state-owned company has a stake. But if we take a closer look at Hong Kong-based Hutchison, we see that China’s influence reaches further.

Together with Cosco, Hutchison owns the Euromax Terminal. It also owns ECT Delta – with Euromax, Rotterdam’s largest container companies – and acquired APM Terminals Rotterdam from Danish Maersk in 2021. This makes three of the five largest container terminals fully Chinese-Hong Kong-owned, and one is partly owned. Only APM Terminals Maasvlakte II belongs to Danish Maersk.

Hutchison’s tentacles extend beyond the three largest container terminals

But Hutchison’s tentacles extend beyond the three largest container terminals. In Rotterdam alone, the Hongkongers own several subsidiaries in mooring system rental, container storage and transport, and refrigerated container maintenance and construction.

Outside of Rotterdam, Hutchison has a significant stake in a terminal at the port of Moerdijk in North Brabant, the Netherlands’ fourth-largest seaport, and it owns Venlo’s inland port.

Hutchison also plays a significant role in North Holland. In July 2018, it acquired a 50 per cent stake in TMA Logistics. Located on the North Sea Canal, TMA has terminals in Amsterdam, Velsen and IJmuiden, a transhipment facility in Harlingen and warehouses in Amsterdam, Velsen and Alkmaar.

TMA Logistics is aiming to become a major player in container transport between Rotterdam and Amsterdam, judging from its 2020 financial statements.

It also played an important role in the construction of the Fryslân wind farm, which opened late last year. The storage and transhipment of components for large wind farm projects take place via the terminal in Amsterdam. TMA hopes to increase its share in offshore wind turbine construction in the coming years.

Hutchison’s holdings have not caused much commotion. It is headquartered in Hong Kong, a group of islands that has been a special administrative region of China since 1997. At the time, it was stipulated that the same laws as in communist China would not apply there for a period of 50 years.

But that promise has come to little fruition. The CCP is tightening its grip on governance, politics and public life in Hong Kong, with the provisional low point being the 2020 National Security Law. Since then, life imprisonment can be imposed for ‘secession’, ‘subversion’, ‘terrorism’ and ‘collusion with foreign armed forces’.

Much-needed sales channels

Can large companies like Hutchison, which are important for the Chinese economy, still operate independently of the CCP? And if so, for how long?

Cosco acquired Hong Kong shipping company Orient Overseas Container Line (OOCL) in 2017 from the family of Tung Chee-Hwa. He was Hong Kong’s first chief executive after the region was handed over to China in 1997.

The shipping and logistics sector is important to Xi Jinping’s Belt and Road Initiative. This New Silk Route is not only politically important but also economically: it provides Chinese businesses with much-needed sales channels for their goods.

‘That things in Hong Kong would turn around so quickly and dramatically has surprised everyone’

Haico Ebbers, professor of international economics at Nyenrode Business University, is not worried yet: ‘You see the CCP’s influence on Hong Kong’s political process increasing more and more, but there is no sign of any influence on business yet. I still see Hutchison as a private company.’

This is also Bart Kuipers’ opinion: ‘Hutchison is still not a Chinese state-owned company, and they themselves don’t feel that way either.’ But, he adds: ‘Hong Kong’s position has totally changed. That things over there would turn around so quickly and dramatically has surprised everyone.’

Marching orders

While a Chinese takeover of Hutchison seems far away, future scenarios for the port of Rotterdam do take it into account.

For instance, the Clingendael Institute, in collaboration with Erasmus UPT, recently published Navigating an uncertain future, a scenario study on the influence of China on the future Dutch maritime-logistics hub function. In it, the authors describe four future scenarios.

One of them outlines the possibility that Chinese players will become global logistics leaders, and non-Chinese players will be left behind. In this scenario, Cosco will be the dominant player in Rotterdam, and Hutchison will be acquired by a ‘Chinese operator’, resulting in Rotterdam as a ‘hub function for China’.

Simon Murray, former managing director of Hutchison, also does not rule out a Chinese takeover. In 2019, he told Reuters news agency: ‘Everybody who is anybody at all in Hong Kong has got one eye on how the mainland sees that. And you’ve got to build your bridges with them, otherwise they could confiscate.’

Murray was the longtime right-hand man of business tycoon and billionaire Li Ka-Shing, former CEO of Hutchison (his son, Victor Li, succeeded him in 2018). In the same article about his son Li, Murray said: ‘His attitude towards China is of of fear: these guys can take away everything I have.’

According to Reuters, managers of China’s largest state-owned companies were reportedly given clear marching orders by their regulator SASAC in September 2019: tighten your grip on Hong Kong companies.

According to the lead authors of Navigating an uncertain future (Xiaoxue Martin of the Clingendael Institute, port economist Bart Kuipers, and China expert Frans-Paul van der Putten), their report is based on conversations before the Russian invasion of Ukraine took place.

Kuipers: ‘That invasion makes the invasion of Taiwan more conceivable, especially given all those Chinese military exercises happening around Taiwan. No one was talking about that when we conducted those interviews for our report.’

In a recent article in Newsweek, China analyst Didi Kirsten Tatlow points out China’s habit of using trade as a weapon; for example, by suddenly blocking exports or imports of certain goods.

According to Tatlow, with its growing influence in ports worldwide, China is first and foremost interested in trade. ‘But secondly, it wants to become so dominant, including in logistics information and digital systems, that other countries can’t really afford to impose sanctions on China anymore.’

A gateway to Europe

The only thing that is now certain about the future of the Netherlands as a logistics centre is that nothing is certain.

Port economist Kuipers: ‘There was a lot of fuss about Cosco acquiring a stake in Hamburg, but almost no attention was paid to something much more important: Cosco withdrew from a major project to build a mega-terminal at the port of Duisburg, also in Germany. That had already been decided in the summer but was only recently made public. It is remarkable because Duisburg plays an important role in the Belt and Road Initiative. Naturally, there was some fear in Rotterdam that Duisburg would become a major competitor as a gateway to Europe.’

‘More European cooperation is needed to counter Chinese influence, but in Europe, you see everyone going their own way again‘

Although Duisburg’s role appears to be diminishing, expansion is in the pipeline at several ports in the Netherlands. In Rotterdam, for instance, Hutchison wants to substantially expand one of its terminals. That expansion will be accommodated in a joint venture with Swiss/Italian container company MSC. ‘Remarkable that this is not happening with Cosco, but instead with the largest container shipping company in the world,’ Kuipers responds.

Has China’s influence in Rotterdam passed its peak? ‘That cannot be predicted; it depends on government policy. On the one hand, it is becoming clear that more European cooperation is needed to counter Chinese influence. On the other hand, om Europe, you see everyone going their own way again,’ says Kuipers, pointing to Cosco’s stake in a Hamburg terminal.

The fear of China’s dominance is nothing new. Back in 2010, the Port of Rotterdam Authority said that the Chinese becoming too influential was imminent. To prevent that, the Port of Rotterdam Authority decided to allow other players onto the Maasvlakte, such as Denmark’s Maersk and DP World from Dubai. At that time – the Second Maasvlakte was still under construction – 60 per cent of container handling was in the hands of Chinese companies.

Twelve years later, not much has come of its intention to limit Chinese influence. One of Maersk’s two terminals was acquired by Hong Kong’s Hutchison last year.

Dubai state-owned DP World is one of the five partners in the Rotterdam World Gateway terminal. While Chinese companies controlled 60 per cent of container transshipment in 2010, in 2022, that share is at least as large. Thus, with the construction of the Second Maasvlakte, the Chinese stake in the port has actually increased in absolute terms.

Commercial bloodbath

CBS recently calculated that in 2021 China’s share of imported goods further increased. Not surprisingly, Hutchison announces that it wants to double the capacity of its inland terminal in Venlo by 2024.

But the latest figures on China’s economy are disastrous. In November, exports declined heavily due to drastic covid measures and reduced demand for goods in the global market.

Meanwhile, container transport rates also dropped to near-normal levels again. ‘The container sector is facing disaster,’ port economist Bart Kuipers predicts. ‘Rates are collapsing, and demand is decreasing. And many container ships are still under construction. That could become a commercial bloodbath, not only for shipowners but also in the terminal business. That’s when you will see many takeovers, and now unthinkable movements in the market are possible, even a takeover of Hutchison by a wealthy Chinese company.’

Translation: Delia Burggraaf