“China seeks to control value chains and the operational backbone of international trade,” highlights to GeoTrends Professor Isaac Kardon, a leading authority on China’s maritime strategy and fellow for China Studies at the Carnegie Endowment for International Peace. Delving deeper into China’s “modern maritime strategy,” Dr. Kardon outlines that Beijing is consolidating control over the infrastructure of global trade, explaining how China has expanded its domestic transport networks and international shipping reach to position itself as a dominant force in shipbuilding, container production, and port operations worldwide.
Reflecting on the potential implications for the future of international trade, he unpacks the strategic logic behind China’s maritime ambitions and examines what this means for the evolving global trading system.
– For someone outside the shipping industry, how would you define “China’s modern maritime strategy”?
China’s modern maritime strategy is to control all of the vertical elements of global maritime transportation and, in fact, international trade in general. What they have done is systematically build out their domestic transport networks and international trade networks. The shipping piece of it is one really essential, capital-intensive, and complex element in a much broader chain. And I think, just to give a more general strategic framing of why China feels the need to control the value chains and the actual operations of international trade, it is because the geopolitical environment in which they are operating is one that we in the West have long recognized as an open, globalizing system underpinned, among other things, by a great deal of U.S. and allied naval power supporting a particular type of maritime order.
But that is not an order in which China can feel confident it will always be included. It has had the good fortune—as they are often reminded—of being allowed to join all the major institutions of global trade, to gain most-favored-nation status, and so on. Yet they have always operated with a fundamental sense of vulnerability. And I think that really is the crux of why China has taken such a huge market share across so many elements of the global shipping and transportation sector.
I am sure your readers and listeners will already be aware of some of the scale of it. For example, 75% of new ship builds were ordered in Chinese yards this past year, and 95% of all the containers in the world are manufactured in China.
– How does their strategy differ from foreign strategies pursued by other countries?
I think it is fundamentally different from any other country, to be honest, because China is the only nation that has the capacity and the power to effectively control its trading. Not only the United States and China have that type of capability, but it is also instructive to compare China to the United States, which, as I mentioned, continues to be the global naval power and will remain so even as China modernizes and grows its navy, because of the nature of their missions and the nature of their global strategies.
– Would you say the economic dimension is the key to understanding Beijing’s strategy?
China’s strategy is best understood through its economic activities. I have done a lot of research on Chinese port investments and development overseas, and one of the questions I most often get from people in the U.S. and elsewhere is: are these port investments and operations commercial, or are they strategic? And the answer is yes. The category error is excluding commercial or economic activity from the strategy. From China’s perspective, the central leadership’s primary goal is to stay in power. Their theory about how to do so is to get rich, get strong, and defend their rights and interests as they understand them.
– How does this strategic mindset shape China’s role in the global system?
Τhey have an inverse strategic orientation to the United States. They are not responsible for anyone else’s security or for maintaining the openness of the global system. They are responsible for their own trade and what they call “dual circulation,” the main domestic economic policy. This means they want to create international dependencies on China while reducing their own dependencies domestically, aiming to secure a complete supply chain for all essential manufacturing.
The one thing they do not have—and will not have, not just in the foreseeable future but physically—are the raw materials necessary for their industrial and manufacturing systems to function. And so, why is economic activity, and in particular global trade, essentially strategic for China? Because critical minerals, oil and gas, agriculture, and other essential inputs all flow from foreign markets. These require new port terminals, large-scale shipping, and related infrastructure.
These are strategic investments for Chinese firms, which are led by central state-owned enterprises, run by vice-minister-level officials appointed by the government. It is important to recognize that this is very much a national security strategy rooted in economic security. And that is something that anyone familiar with Chinese national security discourse will readily recognize.
– Do you think that Beijing can view dominance in shipping as a security imperative or as a commercial ambition?
So, I would rephrase that. I do not think they view dominance in shipping as necessary. What they need is indigenous shipping capacity and control to support everything required for their national security. That is the way I would think about it.
To the extent that this means behaving in uncompetitive and non-market ways—in competition with, say, Greek, French, Singaporean, Korean, or Japanese shippers—what they are aiming for is not necessarily dominance. This is the way it has been understood in the U.S. as well. If you look at how the tariff regime has begun to be applied to Chinese shipbuilding through “Section 301” petitions, it reflects the same idea: that China has unfairly targeted certain industries for dominance. Western shipping and other maritime transportation firms have certainly felt this, as China has chewed up market share. But in reality, that is an incidental goal.
China’s true objective resembles “autarky”: securing resource flows through assets and channels it fully controls and transportation channels, importantly along sea lines of communication that it can credibly protect with its navy. There is a whole range of other missions that flow from this, which help explain why China has driven development in this space so aggressively.
At the core, they feel very insecure. They feel vulnerable to American seapower and financial power, and they have never been comfortable operating in a system where global trade is upheld by international institutions outside their control.
– When speaking about the “great power competition,” we always see the term “shipping race.” In your view, is this “shipping race” more about controlling infrastructure like ports and shipyards, or is it about flows, like trade routes and shipping volumes?
I think those are both valid ways to conceptualize what it is. I think they are doing both, because that is the network. The network consists of nodes and flows. Let me give you an illustrative example. In Western Africa, there are a number of projects predicated on having a mine, a way of transporting mined materials to a port, and a factory port, at least up to modern standards, that can load bulk or offload minerals, say bauxite. And the flows are essential and strategic.
China needs those raw materials coming in, and they need them to be reliable. There is some reliability in having Maersk ship it. Moreover, over the past 40 years, China has been the main driver of commodity prices, mostly pushing them up. There have been some soft spots, but part of the process is that China has brought many of those resources online.
Another key point is that China entered the global oil and gas market relatively late. They still do not have a firm at the level of the Western majors. Instead, they have reallocated much of their emphasis to the next generation of energy technologies. Strategically, they are trying to wean themselves off oil and gas. Climate concerns are, I think, quite remote from their strategic calculus. But those next-generation technologies are also very resource-intensive and involve resources that China does not have.
It is worth highlighting that, per capita, China is one of the most resource-poor countries in the world. Most of the country is desert or mountains. The intensely populous area is concentrated along the east coast—the East China Sea and South China Sea. This set of considerations makes the question of flows and points an integrated one. They need both. Where assets are unreliable, they want to build their own. They want to develop their own access and secure their own flows of commodities essential to their domestic economy.
– How critical are Chinese-operated overseas ports, like in Piraeus, to the country’s long-term maritime strategy?
I think Piraeus in Greece is one of the crown jewels of China’s efforts in international port development. As I said at the outset, it is both commercial and strategic. It is, I believe, the highest-throughput container port in the Eastern Mediterranean—perhaps Valencia has higher overall volumes—but Piraeus went from a very low and dysfunctional base to what is now, by all accounts, a very successful commercial operation. I have spoken with people there, and not everyone is thrilled about the relationship, but from an operational standpoint, they are doing quite well.
– What role does Piraeus play in China’s wider trade with Europe?
That port is part of a larger strategic picture tied to commodity flows. For China to buy commodities, it must sell merchandise, especially in Europe. The European Union has been China’s largest single trading partner for most of the last decade. If you include the UK and other non-EU states, the Mediterranean becomes a critical entry point to European markets. Having a transshipment hub there is essential, and Piraeus is China’s main play for southern and western Europe.
– Some argue Chinese port control could have military implications. How do you see this risk?
In higher-level terms, some observers conflate Chinese control of a port with the likelihood of it becoming a military base. I do not view Piraeus that way. I do not view any port operated by Chinese firms in Europe as realistically having that kind of military potential. But that does not make it non-strategic. There are many ways in which simply being present, having operational control, and gathering information about both commercial and military activity in the Mediterranean provides strategic benefits to China.
In the narrower case of Piraeus, there is understandable consternation over the fact that the asset was sold off in a fire sale, under unusually permissive conditions compared to other Chinese port acquisitions. The operator is COSCO, a central state-owned enterprise that once formed part of the Ministry of Transportation in the PRC, very much a state organ. That broader scope raises questions about what else might be happening at the facility. Operating a major terminal inherently generates intelligence. Some of that is valuable to the military. The more such a facility is under the control of a Chinese actor, the less visibility the local host state retains over security matters. I am not an expert on electronic surveillance, signals intelligence, or cyber operations, but it is worth noting that these ports—especially in Greece but also elsewhere—are deeply linked to intermodal networks and telecom networks. They are essential nodes enabling flows of all kinds and underpinning China’s trade-led strategy. Circulating exports into Europe require such ports, and as those ships return from Europe, they pass Africa, the Middle East, and South Asia—“the commodity run.” For China’s strategy to succeed, that circulatory system must function smoothly and securely.
– Looking ahead to 2050, do you think the global shipping industry will be more multipolar, or will it tilt toward an Asian-centered network?
That is a really interesting question. I see significant fragmentation emerging, which aligns with both ways of framing it. If and when tariffs are initiated against Chinese-built or Chinese-owned ships—currently slated for this October—that will be a real test of the system’s direction.
One possible outcome is that major global carriers restructure their fleets, hiving off vessels built in Korea, Japan, or Europe to serve the U.S. market. That would produce a “bifurcated system”—essentially a bipolar economic order. Another possibility is simple splintering.
– What does this potential fragmentation mean for global governance and maritime stability?
The United States is not necessarily the sole center of gravity, though it remains the largest consumer market and a major energy exporter. For those reasons, it will remain deeply integrated into whatever network emerges. But I think the most likely outcome is fragmentation into more nationally oriented supply chains and energy strategies.
International organizations like the “IMO” will struggle to generate consensus or enforce norms. We already see the emergence of a “shadow fleet” that rivals the “white fleet,” driven by sanctions on Russia, Iran, and others. This “shadow system” will likely expand as sanctions intensify. We are moving away from a single integrated global fleet under “Pax Americana,” toward regionally distinct systems governed by different standards.
For the shipping industry, this is arguably the first time since the Second World War that the globalized structure of maritime trade faces fundamental pressure. Today, “no-go zones” include the Red Sea, Gulf of Aden, Chinese coastal waters, the Black Sea, and the Russian Arctic. We no longer operate in a truly open, freedom-of-the-seas environment, and those divisions will eventually filter into the strategies of global carriers. At minimum, the system will segment; at worst, it will fragment.