At both ends of the Panama Canal are two huge ports operated under the same Chinese company. Any disruption to the canal — through which about 40 percent of U.S. containers pass — could cost U.S. businesses hundreds of millions of dollars a day, which explains why U.S. President Donald Trump has set a goal of ensuring that this critical sea passage remains outside Beijing's reach.
"China operates the Panama Canal – and we didn't give it to China. We gave it to Panama and now we will take it back," Trump said during his inauguration speech in January.
Trump's demand that the Panamanian government revoke C.K. Hutchison's rights to operate the two gates highlights an uncomfortable reality for Washington and other capitals: China has spent two decades building a vast network of ports on every continent except Antarctica.
Chinese companies own or operate terminals in more than 90 deep-sea ports overseas, according to data from Isaac Kardon, a senior fellow at the Carnegie Endowment for International Peace. These include 34 of the 100 busiest ports in Lloyd's List's rankings, such as the fifth-largest container port in Europe, America's first deep-sea port in the Pacific, capable of receiving oversized ships and holdings in over a third of Africa's commercial ports.
"We often say that in order to become rich, we must first build roads," Chinese President Xi Jinping said in 2017, addressing workers at the Tieshan port in the South China Sea. "In coastal areas, in order to become rich, we must first build ports."
China, which in 2024 accounted for about 15% of global freight exports, has a clear economic interest in maintaining a presence on important maritime trade routes. A 2018 PwC study estimated that every dollar China spends on African ports yields $13 in trade volume value, not counting the geopolitical returns on investment.
Bases
For a country with just one overseas military base, port concentration works twofold: Chinese politicians use the term "maritime strategic point" to describe both commercial and military facilities. "There is a significant Chinese presence in every region, around critical marine chokepoints," Kardon notes.
The ports are part of a broader competition for maritime sovereignty between China and the US. The two countries have imposed special tariffs on each other's ships, while the U.S. has mobilized allies such as South Korea to revive their shipbuilding industry. In October, China imposed sanctions on U.S. units of South Korea's Hanwha Ocean.
The degree of control exercised by the Chinese government over ports varies. The ports operated by CK Hutchison, based in Hong Kong, were once considered out of Beijing's direct influence, however this has changed in recent years with the city's declining autonomy. Other ports, such as Piraeus and Chancay in Peru, belong to Cosco, which was blacklisted by the Pentagon because of ties to the Chinese People's Liberation Army.
U.S. authorities say Chinese ports are helping Beijing gather intelligence. Ports in Greece, Nigeria and Sri Lanka have hosted Chinese warships, while China's first overseas military base in the small African country of Djibouti began as a "supply hub" next to a port of Chinese interests.
"Ensuring that the world's ports remain open and secure is critical to global trade," says U.S. Senator Andy Kim. "China's growing global port network threatens these goals."
In Europe, the Chinese presence in ports has raised concerns. Piraeus, where Cosco acquired 67% of PPA in 2016, was considered a strategic mistake by the West, although the investment proved to be a commercial success, with revenues more than doubling to €231 million. in 2024. About 1/10 of European port capacity is now owned by Chinese investors.
In Nigeria, the Lekki Deep Sea Port, completed in 2023 at a cost of $1.5 billion, was funded by the China Development Bank and constructed by state-owned China Harbour Engineering. It has reduced wait times and allows connections to other regions via rail, boosting exports and freight transportation.
In Latin America, Chancay in Peru, a port with oversized capacity worth $1.3 billion, significantly reduces transit times for agricultural products to China and strengthens the country's negotiating position vis-à-vis the US.
No refund
The Trump administration's attempt to restore U.S. control over Panama's ports, through a possible sale of four terminals in Mexico and one in the Bahamas, highlights how crucial Chancay is to restructuring Latin America's trade with China.
In Australia, the strategic port of Darwin, operating under a long-term concession to a Chinese group, is facing political pressure to return to government control, due to its proximity to Asia and military surveillance capabilities.
China now has a sufficiently extensive port network to secure significant advantages, making it difficult for the U.S. to reverse the situation. "In terms of market share, they cover all of their basic needs," says Kardon. "It's not clear if they need anything more."
Adaptation – Editing: George D. Pavlopoulos
