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In recent months, the flagship Taiwanese tech firm, the Taiwan Semiconductor Manufacturing Company (TSMC), has been a focus of discussions about a potential Chinese invasion of Taiwan. For instance, Nikkei published a piece by Jared M. McKinney, a professor at the U.S. Air Force War College. McKinney argues that Taiwan should destroy TSMC’s world-leading chip foundries to prevent them from falling into PRC hands.

After China gets its hands on the advanced extreme ultraviolet lithography (EUV) machines, McKinney contends, it could then proceed to develop its own alternative chip-making capacity; “Once it got through short-term disruptions, China could emerge as a semiconductor superpower that is essentially self-reliant.” It follows that threatening to destroy the machines would help deter an invasion, and “It is in Taiwan's interest to make clear that China will not gain access to TSMC's EUV machines and semiconductor foundries if it invades.”

However, the truth is simple: TSMC is irrelevant.

Long before TSMC emerged as a semiconductor colossus, Chinese leaders claimed Taiwan as a sovereign territory of the People’s Republic. The claim exists irrespective of Taiwan’s economic prowess. Although McKinney does not argue the TSMC drives the PRC’s annexation dreams, other commentators like Marc Kennis have argued this explicitly. If TSMC disappeared tomorrow, Beijing would go right on pretending Taiwan has always been part of China.

Prior to 1942, as Alan Wachman observed in Why Taiwan? Geostrategic Rationales for China’s Territorial Integrity both the Nationalist (KMT) and Communist (CCP) leaderships were indifferent to Taiwan during the interwar period. Comments from elites, youth publications, and government intelligence reports treated Taiwan as lying outside China’s traditional domain and assumed that the island’s inhabitants would one day form an independent state.

After Japan brought the US into World War II, Chinese elites began considering what territories would be up for grabs following the conflict. The KMT government under Generalissimo Chiang Kai-Shek started to rewrite the history of China to include Taiwan, and the Communists followed suit when they took power in 1949. With a zeal whose strength is as great as its historical foundation is false, the Party leadership has internalized the doctored history behind unification as a key strategic objective. In 2000, long before TSMC had become a household name and the darling of would-be George Kennans on the internet, then Chinese Premier Zhu Rongji snarled on the eve of Taiwan’s presidential election: “no matter who comes to power in Taiwan, Taiwan will never be allowed to be independent.”

TSMC is thus irrelevant to the PRC’s desire to annex Taiwan. It is just as unrelated to Chinese objectives following a hypothetical war and occupation.

First, the advanced lithography machines at TSMC will quickly become useless in the event of war. Should they go offline for even a few days, they will accumulate dust and other contaminants and require extensive cleaning. But any war in the Straits will likely go on for weeks. Once the machines go offline, as electricity, labor, and water systems collapse, they will quickly become useless. Dormant machines will require disassembly, refurbishing, or reconstruction once. I have heard from experts that it is unclear whether TSMC staff could do that without foreign inputs, even in peacetime. The war itself will destroy them without Taiwanese sabotage.

TSMC is dependent on supply chains that stretch across national boundaries. Numerous Japanese firms, such as Resonac, which supplies a compound used to polish the silicon wafers, and Shin-Etsu Chemical, help keep the assembly lines rolling. This flow of material imports would dry up instantly in the event of invasion.

The same would go for the hundreds of smaller firms that populate the upstream and downstream of TSMC’s logistics stream. The skilled workers may be conscripted into the army or flee the island. An exodus of essential foreign technicians and migrant laborers is also on the cards. How many will return to work under the PRC’s authoritarian rule?

If the PLA captures TSMC, its technological advantages will quickly fade as new chip manufacturers emerge elsewhere to meet global demand. China, for years, has been cut off from cutting-edge chip-making technology, and its own attempts to forge a world-beating chip industry have foundered on its strict information controls. Not by coincidence, the world’s leading chip firms have emerged in societies where skilled labor and information circulate freely. Hence, when TSMC becomes Chinese, it will fall out of the mainstream of global chip production.

Moreover, practical issues abound. McKinney and others imagine a world where events will quickly return to normal once the war ends. That is not our world. In recent years Taiwan has suffered from chronic drought. In response, TSMC has acquired a fleet of trucks to supply it with over 150,000 tons of water daily. Though generally ignored in invasion hypotheticals, Taiwan's creaky water system is vulnerable to missile attacks or sabotage on dams, pipes, and reservoirs.

Not only is the water supply to TSMC likely to fail and not be easily restored, but its fleet of trucks will be critical war equipment subject to requisition by the government. “In war,” a local city planner once told me, “there will be no private property.” Nor is China, learning from Ukraine, going to leave Taiwan’s electricity systems in operation. The PLA’s artillery, drones, and missiles would target prime movers of every kind, along with buses, public transport systems, trains, roads, bridges, and tunnels (where Taiwan will likely stash its mobile weapons systems). In occupied Taiwan, transportation infrastructure will be scarred for years.

Beijing is well aware of all this. The truth is that TSMC is leverage, but only for China. As long as Taiwan’s fabs are intact and functioning, the PRC gains from threatening to destroy them (“surrender, or we’ll devastate your economy!”), while Taiwan gains nothing from destroying them. Beijing will simply shrug. Indeed, that their destruction might demoralize Taiwan’s population and hurt its export economy is a good reason Beijing might just go ahead and destroy them. The symbolic meaning of Taiwan’s tech industry as the basis of its free existence makes the island’s chip factories targets as tempting as the former mosques in Xinjiang.

Recall that Beijing does not merely want to annex Taiwan: it wants to annihilate the whole idea of an independent, democratic, high-functioning, free Taiwan. Its democracy is a daily refutation of the CCP’s claim that only the party can rule the people it deems “Chinese.” Behavior ranging from the occupation of Hong Kong to the CCP’s strict controls on Chinese firms—and mandatory party appointees in foreign ones—all show that economic gains are less important to the Party than political dominance.

Want to help the US defend Taiwan? Stop talking about TSMC, and start talking about rebuilding the US defense industrial base, cultivating alliances with Japan and other Asian nations, and, most urgently, putting more vertical launching systems on the water to counter the PRC’s massive navy.

After all, those fabs are hothouse flowers that, one way or another, will die the moment the heat of war scorches Taiwan.

Michael Turton is a columnist for the Taipei Times.

Image: Shutterstock.

On June 14, the U.S. Air Force deployed fifth-generation F-22 Raptors to Syria to deter what U.S. Central Command described as “increasingly unsafe and unprofessional behavior by Russian aircraft in the region.” The Raptor, an advanced air-superiority fighter that is renowned for its stealth capabilities, is intended to increase the U.S. military’s ability to defend the 900 U.S. servicemembers that remain deployed in the war-torn country.

The last time the United States sent F-22 fighters to the Middle East was last year, when the combat jets flew to the United Arab Emirates in a show of force following drone and missile attacks by Yemen’s Houthis. However, it is not the aircraft’s first stint in Syria. In the spring of 2018, the F-22 provided “defensive counterair” capabilities by holding Syrian air defense assets at risk during the U.S.-led, multinational strikes against Syrian military targets in response to Damascus’ suspected chemical weapons attacks. Then, in the fall, the F-22 completed its first “combat surge” in Syria, in which U.S. Raptor pilots flew “deep into Syrian territory, facing both enemy fighters and surface-to-air missile systems” and deterred nearly 600 Syrian, Iranian, and Russian combat aircraft from threatening U.S. military personnel.

The F-22 has its work cut out for it in Syria, whether in deterring the Russian military or aiding the broader U.S. military mission. Indeed, despite these deployments in defense of the years-long U.S. military presence on the ground, the Air Force reports that Russia has stopped adhering to agreed-upon deconfliction agreements in Syria’s busy skies and that Russian aircraft are harassing U.S. personnel with increasing frequency. The United States has long been concerned about Russian harassment of U.S. forces but has recently observed a “significant spike” in Russian aerial aggression in Syria. On the ground, too, U.S. servicemembers face a variety of threats from Russian forces, which have physically harassed and threatened Americans across the country.

Russia maintains over 2,500 military personnel in Syria in support of its ally, Syrian president Bashar al-Assad, which for all intents and purposes has won his country’s civil war after more than a decade of conflict. Russia and Syria have long disparaged U.S. troops as “occupiers” and insisted that they leave the country. The U.S. refusal has put Americans in harm’s way, and not just from Moscow and Damascus. Iran, another Syrian and Russian ally, has regularly targeted the U.S. military as well. As recently as last March, for instance, a drone attack of “Iranian origin” killed one U.S. contractor and wounded six others in Syria, raising questions about the logic and sustainability of a U.S. presence that has persisted in Syria since 2015.

The United States government consistently points to the threats posed by the remnants of the Islamic State when it justifies the U.S. presence in Syria. To be sure, even after losing its territorial holdings in Iraq and Syria, the terrorist group’s resiliency continues to pose a complex challenge for the U.S.-led multinational coalition, which carried out 313 anti-ISIS operations in 2022. Yet the United States faces more and direr threats from Russia, Iran, and the Syrian government than ISIS itself, which has lost its once-formidable capability to carry out coordinated offensive operations in the Middle East or farther abroad.

In fact, ISIS cannot be defeated by military action alone: tens of thousands of ISIS prisoners, including many foreign fighters and their families, are languishing in Iraqi and Syrian detention centers and prisons. Until these people are repatriated to their countries of origin, they will be at risk of radicalization and recruitment by jihadists, and ISIS will continue to target the prisons in its efforts to free its comrades. As U.S. policymakers should have learned from the U.S. war efforts against Al Qaeda or the Taliban, ISIS is not a problem that the United States can kill its way out of.

However, much like the Taliban has proven its commitment to fighting ISIS even after the United States left Afghanistan, there is reason to believe that Syria, Iran, and Russia will not tolerate ISIS in the Middle East either. Americans should recall that Iran was instrumental in the U.S.-supported fight against ISIS in Iraq and opposed the same terrorist presence in Afghanistan, while Russia has fought ISIS in its efforts to secure Assad’s rule.

It is additionally worth remembering that when President Donald Trump ordered a snap withdrawal from Syria in 2019, it was Russia who moved its troops into the abandoned U.S. outposts and called for de-escalation between the Kurds and Turkey in the northeast. Moscow’s subsequent, fruitful negotiations with Turkey then led to an agreement that prevented a Turkish military operation against the Kurds in exchange for the latter retreating from the Syrian-Turkish border. Turkey, which was responsible for killing ISIS’s latest leader last month, is committed to combatting the same Syrian Kurds that the United States has been supporting since 2014—greatly straining the U.S.-Turkish relationship. This is just one more Gordian knot that the United States has been trying to untie in Syria—without much success.

The fact of the matter is that the United States is an outsider with few friends in Syria. As an uninvited guest in the country, it remains a target of Syrian, Russian, and Iranian military pressure. Its own allies and partners, from the United Arab Emirates to Saudi Arabia and the broader Arab League, have begun welcoming Damascus back into the regional fold with open arms. Its policy of regime change, which began under the Obama administration but has continued in different forms, has long failed. Far from Russia being isolated—even after its invasion of Ukraine—Moscow continues to be an indispensable player in Syria, for Damascus and Tehran as much as Jerusalem and Ankara. The countries of the Middle East understand that the United States will not stay in Syria indefinitely, and they are hedging their bets accordingly. But America has not adapted in kind; instead, it has stayed the course, enduring casualties while vainly searching for a way out. But after nine years of war, only one thing is clear: no amount of F-22s can help America defeat the consequences of its own policy failings.

Adam Lammon is a former executive editor at The National Interest and an analyst of Middle Eastern affairs based in Washington, DC. The opinions expressed in this article are his own. Follow him on Twitter @AdamLammon.

Image: Image courtesy of the U.S. Air Force.

After the initial near-euphoria about Large Language Models, or LLMs, that power generative artificial intelligence (AI), the mood has gone sour. The spotlight shines now on doomsday scenarios where LLMs become self-aware, go out of control, and extinguish humanity.

Fear of sentient robots is hardly new. In an 1899 short story, Ambrose Bierce conjured a robot created by an inventor named Moxon. It looked like a person, if a dour one, but it wasn’t smart enough even to beat Moxon at chess. And when it lost, the robot revealed deep wells of uncontrolled emotion: it murdered Moxon.

This fear has maintained its popularity ever since in books, plays, and movies. Some bad robots appeared simply as machine systems, like homicidal HAL in Stanley Kubrick’s classic 2001: A Space Odyssey. Some robots look human, like the Terminators. And beyond the murderous robots, there are sometimes big networks of robotic systems, such as in The Matrix, whose aim is to enslave humanity. Even Isaac Asimov, who tried to rein in robots with three laws that forbade doing harm to humans, worried that robots could circumvent such strictures.

ChatGPT and Bard are two prominent examples of LLMs that amaze with sophisticated answers to questions. These systems have sparked a huge wave of investment in new services powered by LLMs. And they have unleashed a torrent of anxiety about how their proneness to “hallucinate” (make stuff up) might create havoc with fake news, stolen elections, massive job losses, undermined trust in business, or even destabilization of national security. The worst fears concern the potential for the machines to become sentient and subjugate or exterminate us. A chorus of leading voices from the worlds of high tech and politics has made a case, best summed up by Henry Kissinger, that current advances in AI have put the world in a “mad race for some catastrophe.”

Our assessment is that the furor over the extinction prophecy has gotten the better of us and is distracting from the important work of learning how to use an extremely valuable but inherently error-prone technology safely.

The core of ChatGPT is a huge artificial neural network of 96 layers and 175 billion parameters, trained on hundreds of gigabytes of text from the Internet. When presented with a query (prompt), it responds with a list of the most probable next words. A post-processor chooses one of the words according to their listed probabilities. That word is appended to the prompt and the cycle repeated. What emerges is a fluent string of words that are statistically associated with the prompt.

These strings of words are drawn from multiple text documents in the training set, but the strings do not appear in any single document. ChatGPT is incapable of verifying whether a response is truthful. Its responses that make no sense are called “hallucinations” when all they are is statistical inference from the training data.

Despite their unreliability, LLMs can be useful for amusement and for initial drafts of documents, speeches, research projects, and code. The smart thing is to use them for these purposes but not in any application where harm can result from invalid answers. In fact, it is not hard to imagine harnessing the machine impartiality of ChatGPT to solve contentious problems. For example, we think a robotic approach to gerrymandering would be a great way to build confidence in AI. Task competing LLMs with designing congressional districts that look like simple geometric forms rather than exotic reptiles. The main guidance would be that the districts would have to be as balanced as possible between the registered voters of the two major parties. Our bet is that bots will succeed wildly where humans have failed.

What about the fears of sentience? Can LLMs eventually absorb so much text that they possess all human knowledge and are smarter than any of us? Are they the end of history? The answer is a clear no. The claim that all human knowledge can eventually be captured into machines makes no sense. We can only put into machines knowledge that can be represented by strings of bits. Performance skills like sports, music, master carpentry, or creative writing are prime examples of knowledge that cannot be precisely described and recorded; descriptions of skill do not confer a capability to perform. Even if it could be represented, performance skill is in forms that are inaccessible for recording—our thoughts and reflections, our neuronal memory states, and our neuro-muscular chemical patterns. The sheer volume of all such nonrecorded—and unrecordable—information goes well beyond what might be possible to store in a machine database. Whatever functions can be performed by LLMs are small compared to human capabilities.

In addition to this, statistical inference is surely not the whole story of human cooperation, creativity, coordination, and competition. Have we become so mesmerized by Large Language Models that we do not see the rest of what we do in language? We build relationships. We take care of each other. We recognize and navigate our moods. We build and exercise power. We make commitments and follow through with them. We build organizations and societies. We create traditions and histories. We take responsibility for actions. We build trust. We cultivate wisdom. We love. We imagine what has never been imagined before. We smell the flowers and celebrate with our loved ones. None of these is statistical. There is a great chasm between the capabilities of LLMs and those of human beings.

And beyond LLMs, there is no sign on the horizon of a more advanced, close to intelligent, technology.

So, let’s take a sober attitude toward LLMs, starting by curbing the sensational talk. What if we use the phrase “statistical model of language” instead of “Large Language Model”? Notice how much less threatening, even silly, the extinction prophecy sounds when expressed as, “Humanity goes extinct because of its inability to control statistical models of language.”

Tamping down unreasonable fears will allow us to attend to the serious matters of the economic and social impacts of the latest advances in artificial intelligence, and of LLMs’ penchant for inaccuracy and unreliability. Let us also address the geopolitical stresses between the United States, China, and Russia, which could be exacerbated by an unbridled military arms race in AI that might make going to war seem more thinkable—and which would actually heighten the risks of nuclear escalation by the side losing a machine-based conflict. In this respect, we concur with Kissinger that advanced AI could catalyze a human catastrophe.

Above all, as with previous periods that featured major technological advances, the challenge now is to chart a wise path around fear and hype.

John Arquilla and Peter Denning are distinguished professors at the U.S. Naval Postgraduate School. John Arquilla’s latest book is Bitskrieg: The New Challenge of Cyberwarfare (Polity, 2021). Peter Denning most recently co-authored Computational Thinking (MIT Press, 2019).

The views expressed in this article are solely theirs.

Image: Shutterstock.

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Il n'y aura sans doute bientôt plus de terrains vagues dans les grandes villes, et pas davantage de lieux désaffectés, refuges des enfants, des errants sans toit, des artistes à la recherche d'un local même ouvert à tous les vents : l'« urbanisme transitoire » se charge de les transformer en sites (...) / France, Art, Logement, Société, Urbanisme, Ville, Banlieue - 2018/04

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As the Republican presidential primary intensifies, a burgeoning contingent of right-leaning foreign policy experts has emerged to claim that President Joe Biden’s Ukraine policy is eroding America’s ability to deter a Chinese invasion of Taiwan. Consequently, they recommend drastically reducing, if not outright halting, American support for Ukraine’s defense. Politically, this argument is shrewd—it appeals to an increasingly Ukraine-skeptical Republican primary electorate without compromising its proponents’ credibility within mainstream foreign policy circles. Given the widespread consensus that China poses America’s most significant strategic challenge, framing a rollback of current Ukraine policy this way lends the argument an air of hard truth told by sober-minded adults. However, while certainly politically savvy, geopolitically, this line of reasoning is highly unsound.

At its core, the case for reducing U.S. support for Ukraine is based on a supposed policy tradeoff: every dollar or bullet sent to Ukraine is one less for Taiwan’s defense. Because Taiwan’s security is more strategically significant to Washington than Ukraine’s, critics claim the U.S. must realign its policy to match its priorities.

However, this argument overlooks several factors that challenge its fundamental assumptions. Notably, one doesn’t need to accept the view expressed by the Taiwanese, among others, that the United States must support Ukraine to deter China. Even setting aside concerns about U.S. credibility or resolve, there is ample reason to conclude that the critics of Washington’s current Ukraine policy are mistaken. Similarly, while the most compelling argument for assisting Ukraine is arguably the moral one, even within the framework of tradeoffs, the case for the Biden administration’s current policy is strong.

First, the defense budget does not solely consist of spending on Ukraine and Taiwan. Many other programs, some arguably wasteful, could be reduced or eliminated to increase funding for Taiwan’s defense. Furthermore, Russia is China’s most militarily capable partner and would likely be willing to supply weapons to China during any conflict over Taiwan. Therefore, providing Ukraine with the means to destroy Russian military capabilities is possibly the most cost-effective Defense Department program currently in existence, even when one looks at it through the lens of a Taiwan contingency. And while far from guaranteed, if Russia’s poor performance in Ukraine eventually results in Putin’s overthrow and replacement by a more benign Russian government, the gains to U.S. and Taiwanese security would be even more significant.

The radically different nature of the two conflicts further undermines the notion of a sharp tradeoff between arming Ukraine versus Taiwan. The Ukraine conflict is predominantly a land war fought over short distances, while a Taiwan conflict would likely be a primarily naval war fought over long distances. While reports of the depletion of American weapons reserves are worrying, the weapon systems in question are not the submarines, aircraft, anti-ship missiles, sea mines, and torpedoes crucial to Taiwan’s defense.

The U.S. military has also gained valuable information thanks to its support for Ukraine. The war has exposed inefficiencies and gaps in America’s defense industrial base—lessons better learned now than in the middle of a potential conflict with China over Taiwan. The Ukraine mission is also giving the Pentagon a chance to test new equipment and develop the logistical skills necessary for long-distance supply operations, knowledge that would prove invaluable should the United States need to come to Taiwan’s defense.

One might counter that the U.S. commitment to Ukraine will tempt China to strike Taiwan while the United States is tied down in Europe, especially if the conflict drags on for years. But attacking Taiwan while the Ukraine conflict is ongoing would be a strategic disaster for China. Beijing hopes to drive a wedge between Europe and the United States over Taiwan, and as evidenced by recent comments from leaders like French president Emmanuel Macron, they have had some success. However, a Chinese attack on Taiwan amid Russia’s invasion of Ukraine would torpedo that diplomatic effort and likely result in the two conflicts merging into one global East-West struggle. Under such circumstances, Europe would likely support U.S. efforts to defend Taiwan in return for continued American assistance in Ukraine. In short, attacking Taiwan in the context of the Ukraine war makes the emergence of a pan-Western coalition to counter China more likely, not less.

Lastly, there is an essential distinction between the current conflict in Ukraine and a hypothetical one over Taiwan that makes arguments about potential tradeoffs moot: the role of nuclear weapons. The U.S. has wisely refrained from direct involvement in the Ukraine war to avoid the possibility of a nuclear confrontation with Russia. But a serious conflict over Taiwan would necessitate significant U.S. military involvement, likely involving missile strikes on the Chinese mainland. It is illogical to conclude that Washington is correct to worry that direct military engagement in Ukraine could result in a nuclear war with Russia, but killing significant numbers of Chinese citizens does not also risk a nuclear exchange. Misconceptions about the role of atomic weapons in a Taiwan conflict have likely been reinforced by DC think tanks’ war games, which often take them off the table. But in any real-world conflict over Taiwan, the prospect of nuclear war would immediately loom over the minds of policymakers in both Washington and Beijing.

To be clear, the threat of nuclear war with China is not a reason to abandon Taiwan, just as during the Cold War, the threat of nuclear war was neither a reason to abandon Berlin. Nevertheless, the fact that hypothetical mushroom clouds loom over any U.S.-China conflict constrains the role of conventional weapons in any Taiwan scenario.

Those who worry about tradeoffs for Ukraine make the mistake of believing that the United States must exceed China’s conventional capabilities in the Western Pacific to achieve deterrence. Under this logic, it is understandable why one would be desperate to shift every weapon possible from Ukraine to Taiwan. But attempting to match China’s conventional forces this way is untenable and unnecessary.

To deter a Chinese invasion, the United States simply needs to maintain sufficient military capabilities in the region such that China cannot successfully invade Taiwan without simultaneously attacking America’s Pacific bases, particularly Guam, but conceivably Japan and the Philippines as well. Under these conditions, China will find itself confronting a sort of “Guam trigger.” Given the stated U.S. policy, Beijing must operate under the assumption that Washington would actively assist in Taiwan’s defense. If China launches an invasion without first destroying America’s military assets in the region, its ships will be left vulnerable to attack. However, if it launches a preemptive strike on U.S. forces, especially on American soil in Guam, it will experience the full wrath of a vengeful United States. Given this, China faces a choice between a failed invasion or a major conflict likely ending in atomic annihilation. Given those options, Beijing will presumably choose to maintain the status quo, achieving Washington’s goal of deterrence with limited deployment of conventional arms. China may attempt to escape this bind by adopting more restrained tactics, such as a blockade of Taiwan. But any U.S. attempt to counter such a move would primarily involve diplomatic outreach and air and sea lift, areas that are not hampered by U.S. support for Ukraine.

It is undoubtedly correct that U.S. national security officials must recognize tradeoffs, but it is equally true that they must also recognize false tradeoffs when they emerge. The idea that Washington must choose between defending Taiwan and defending Ukraine is one such false choice, and the Biden administration is wise to ignore such criticisms.

Robert Nelson is a Ph.D. candidate at Stanford University studying U.S. foreign policy. He previously served as a national security aide to Senator Chris Murphy. His Twitter handle is @RW_Nelson.

Image: Shutterstock.

Beijing is now the world’s largest holder of international port assets. Through a network of dozens of state-owned port operators, contractors, investment firms, and banks, the Chinese state has invested upwards of $110 billion in foreign port operation and development projects across eighty port states, a value equivalent to the total outward foreign direct investment (ODFI) stock of Israel.

Figure 1. Locations of port investments by Chinese state-owned enterprises.

Figure 2. Chinese state-owned enterprises investing in foreign ports.

These investments were mostly made in the wake of the 2008 Global Financial Crisis, when demand for capital was high and the rehabilitative and mutually beneficial effects of foreign direct investment (FDI) were presumed.

However, the emergence of several troubled Chinese state-led port investments has diminished this optimism. Contentious contract renegotiations, threatened project cancellations, or outright bans on Chinese FDI signal growing unease about “handing over the keys” of one’s critical infrastructure to a foreign government. Such concerns are not unfounded. In a recently published article in the journal Marine Policy (available open access) my co-authors and I argue that the political nature of these investments vis-à-vis Chinese state ownership of the investing firms carries a unique array of economic, strategic, and political risks for the recipient port states.

First, Chinese state-led investments are uniquely susceptible to commercial failure. Overcapacity is a systemic problem in China’s industrial economy, driven by national subsidies and poor internal controls on state-led industrial development. Since 2013, Beijing’s policy on correcting overcapacity has been to offshore it to developing economies through large-scale overseas infrastructure development projects. The result has been several “white elephant”-type port development projects, driven by China’s need to relieve pressure on bloated domestic industries rather than projected commercial benefits for the recipient port state. The most well-known of these is Hambantota Port, whose annual losses of $60 million meant that Sri Lankan authorities were only able to repay the $1.5 billion in Chinese loans used to finance its development by awarding a ninety-nine-year lease to a Chinese state-owned port operator.

Second, Chinese state-led investments risk the host state becoming entrapped in China’s military disputes. As Chinese state control over foreign port assets has grown, Chinese military strategists have increasingly been positioning these assets within Beijing’s naval doctrine. Specifically, these strategists argue that foreign port assets, despite being procured under commercial pretenses, may be appropriated for military missions, ranging from general reconnaissance to serving as logistics and replenishment hubs for Chinese naval vessels. If such military uses were attempted, the host port state would be in the invidious position of either accepting Chinese military operations in its territorial waters and risking retaliation from China’s military rivals, or rejecting Chinese military operations in its territorial waters and risking retaliation from China.

Third, port states hosting Chinese state-led investments risk becoming targets for espionage. Ports are rich targets in this case, both in military and commercial terms. Militarily, espionage can reveal the movement of military hardware through the port as well as the operational characteristics of foreign or domestic navies using the port; for example, resupply and materiel requirements, personnel identities, and origins and onward destinations. Commercially, espionage can provide commercial intelligence on traded consignments and port services which can be mined to provide a competitive advantage to competing firms or identify chokepoints in the industrial strategies of port states. Chinese state actors may, working through Chinese state-owned firms controlling foreign port assets, embed surveillance equipment and personnel into those assets to pursue these military and commercial dividends.

And fourth, Chinese state-led port investments may become vehicles for economic coercion. In times of political conflict between Beijing and the port state, Beijing may instruct its state-owned port investors operating in that state to disrupt port operations, such as by diverting port traffic, halting terminal operations, withholding follow-on funding, initiating vexatious litigation, or terminating the contract. This creates pressure on port states to avoid political conflicts with Beijing to maintain the economic well-being of its Chinese-controlled ports, potentially limiting the port state’s autonomy when dealing with issues sensitive to Beijing. For example, observers have credited Greece’s 2017 veto of a European Union statement on human rights in China on China’s state-owned port operator COSCO taking a controlling stake in Greece’s busiest port the year prior.

While China’s port investments should be encouraged to the extent that they help close the international infrastructure gap, increase legitimate competition among international shipping and logistics providers, and further integrate China into the global economy, port states must remain attentive to the multifaceted risks posed by China’s unique state-led OFDI program.

Dr. Christopher J. Watterson is a Research Fellow at the Department of War Studies, King’s College London.

Image: Shutterstock.

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