Critical infrastructure, critical trade-offs: The growth effects of Chinese investments in European ports

The EU has increased measures to keep Chinese investments out of European ports. We use 1997–2023 quarterly bilateral data on container throughput of 123 European ports to study European ports development under Chinese investments. A fixed-effects estimation suggests that European ports with Chinese investments increased container shipments not only with ports in China but also with ports in other countries. Employing a staggered difference-in-differences approach, we take a closer look at port-specific development and find that especially the ports of Piraeus, Antwerp, Rotterdam, Barcelona, and Le Havre have grown after Chinese investments. Further analyses suggest that Chinese investments contributed to a rebalancing of shipping activities within Europe to the favor of Mediterranean and Atlantic ports, which developed to transshipment and gateway hubs with heterogeneous profiles. Studying shipping adjustments that followed Chinese trade sanctions on Lithuania for the opening of a representative office of Taiwan, we find that ports with and without Chinese investments were affected in a comparable manner. We conclude that the idea of the need to secure ports as critical infrastructure from Chinese investments comes at economic costs borne disproportionately by Southern European economies, hampering their growth opportunities and solidifying existing asymmetries within the European ports industry.