Fears over Chinese ownership of foreign ports 'overstated' - Drewry
CHINA's port and terminal operators have made some significant acquisitions overseas, however, concerns that Chinese terminal operators are taking a disproportionate market share beyond their own region have been overstated, according to Drewry senior analyst Neil Davidson
CHINA's port and terminal operators have made some significant acquisitions overseas, however, concerns that Chinese terminal operators are taking a disproportionate market share beyond their own region have been overstated, according to Drewry senior analyst Neil Davidson.
The share of traffic by the three major Chinese port operators - Cosco, China Merchants and Hutchison Ports - showed little evidence of a major shift into markets outside of China, Mr Davidson said in a webinar event, reported Lloyd's List.
'In the Asia region, Chinese terminal operators accounted for a quarter of all throughput in 2018, but their presence is far more limited in the rest of the world,' he said.
The strongest positions were seen in Europe and Central America, but many of those investments are long-standing, especially those operated by Hutchison.
'To date, Chinese operators have yet to make significant inroads into what are often cited as target markets, particularly Africa and South America,' Mr Davidson said.
Although Chinese players have made some major acquisitions, the global container port market remained large, so it was inevitable that there would be many other investors active in the market, he said.
Furthermore, Chinese activity has become more focused on its domestic markets.
'The Chinese government has recognised that there is some destructive competition and unco-ordinated capacity expansion in a number of Chinese ports and has instructed that they merge together to co-ordinate activities,' Mr Davidson said.
'So, we've seen the coming together of much larger port groups in Chinese ports. There has been a lot of focus to get that sorted, which is bearing fruit.'
Overseas expansion still remains on the cards, however, China's Belt and Road Initiative was taking a lower profile than it had in the past, particularly in light of the trade war.
'The appetite for expansion is still there, but it will be selective and maybe not to the great extent that it was in the past five years,' Mr Davidson noted.
'But it is still happening. There is a deal coming with China Merchants taking stakes in more of the CMA CGM terminals, for example, so where the right opportunity shows up, I think the appetite for further acquisitions will still be there.'