China’s Influence on Ports in Southeast Asia and Its Impact on European Companies

According to a study, European companies are reliant on cooperation with China when shifting their focus to markets in Southeast Asia. One reason for this dependence is China’s control over key ports in the region. A newly released study analyzing mergers and acquisitions in the global transport and logistics sector highlights this development. In addition to China’s attempts to acquire stakes in Hamburg, ports such as Greece’s Piraeus and various investments in Africa are already under new ownership. In the medium to long term, the assumption that further investments in Southeast Asia would lead to greater independence from China could be misleading, said André Wortmann, head of the Maritime Competence Center at PwC Germany in Hamburg.

The study indicates that China is gaining strategic influence in Southeast Asia through direct investments, mergers, and acquisitions. One example is the planned construction of a modern deep-water port in Myanmar, which is largely under Chinese control. The port in Kyaukphyu (Myanmar, formerly Burma), intended to provide access to the Indian Ocean, is a central project in China’s investment strategy under the “New Silk Road” initiative.

China already holds minority stakes in ports in Singapore, Malaysia, and Thailand. Additionally, Chinese investments are increasing in Vietnam, Cambodia, Indonesia, and the Philippines. The number of mergers is expected to rise, though the study does not focus solely on developments in Southeast Asia. Despite the increase, the number of transactions remains relatively low—for now.

Source: PwC Germany, Hamburg.