Research Group on 'China and Maritime Interests/Order' FY2024-# 1

"Research Reports" are compiled by participants in research groups set up at The Japan Institute of International Affairs, and are designed to disseminate, in a timely fashion, the content of presentations made at research group meetings or analyses of current affairs. "Research Reports" represent their authors' views.

Introduction

Since the beginning of the 21st century, China has pursued national strategies to become a "transportation power" and a "maritime power," aiming to expand its international maritime presence. Coastal ports have been rapidly expanded and modernized to serve as critical gateways for international logistics, energy transport, and trade. These ports have become core infrastructure supporting China's status as one of the world's leading trading nations.

At the same time, China has advanced a "Military-Civil Fusion" (MCF) development strategy integrating national defense and economic growth. Under this framework, ports are viewed as dual-use strategic assets, serving commercial logistics and trade functions in peacetime while retaining the capacity to transition into military support bases during times of crisis or conflict.

This paper analyzes the policy background behind China's port development and MCF development strategy, presents specific case studies, examines the evolution in technology, standards, and security dimensions, and assesses overseas expansion, international responses, and future challenges and prospects.

1. Strategic National Context: Background and Positioning of Port Development

Several key factors underlie China's designation of "transportation power" and "maritime power" as strategic national goals¹.

First, as one of the world's top trading and manufacturing powers, China is deeply embedded in global supply chains. Its ports are vital arteries for import-export trade. Major ports such as Shanghai, Ningbo-Zhoushan, Shenzhen, Guangzhou, Qingdao, and Tianjin rank among the highest in global container throughput, functioning as key nodes in international maritime transport networks.

Second, the development and upgrading of port infrastructure is essential for the stable procurement of strategic materials that require bulk transport, such as crude oil, LNG, mineral resources, and food supplies.

Third, under the "near-seas defense, far-seas protection" strategy of the People's Liberation Army Navy (PLAN), the modernization and expanded operational scope of Chinese naval forces have increased the strategic importance of ports as hubs for berthing, maintenance, and resupply of warships, supply vessels, and submarines.

Against this strategic backdrop, the 2019 "Outline for Building China into a Strong Transportation Country²" and the 14th Five-Year Plan (2021) for developing a modern comprehensive transport system³ explicitly call for the Smart Sorts ("智慧港口") and Green Ports ("緑色港口"), along with their integration into multi-modal transport networks. These plans emphasize infrastructure that is efficient, sustainable, and reliable. With the parallel application of the MCF development strategy, a dual-use port model that incorporates latent military requirements into port infrastructure is gradually taking shape.

2. Mechanisms Linking MCF Development Strategy and Port Development

In 2015, China formally designated the MCF Development Strategy as a national strategy. In July 2017, the State Council General Office released the "Guiding Opinions on Deepening the Development of Military-Civil Fusion in the Defense Science and Technology Industry," calling for resource integration across infrastructure, transportation, logistics, manufacturing, and other key sectors⁴. In response, a range of agencies--including the Ministry of Transport, the National Development and Reform Commission (NDRC), the State Administration for Science, Technology and Industry for National Defense (SASTIND), the PLAN, and the China Coast Guard--have worked in coordination to plan port development, set construction standards, address national security requirements, and align technical specifications.

This integration goes beyond the simple sharing of infrastructure. It is based on a design philosophy that enables both military and civilian use, emphasizing enhanced structural strength and durability, increased storage capacity for critical materials, and the installation of robust communication and surveillance systems. At its core, this mechanism reflects China's dual-use doctrine: maximizing economic benefits from civilian port infrastructure in peacetime, while retaining the ability to rapidly and cost-effectively convert such infrastructure for military use when necessary⁵.

In other words, this approach embeds military functionality from the design and investment stages not only in physical port assets but also in the associated logistics networks, information systems, supply infrastructure, and maintenance docks, ensuring rapid responsiveness when needed.

3. Case Studies: Implementation of MCF in Major Domestic Ports

(1) Tianjin Port

Tianjin Port is known as one of the first fully unmanned and IoT-integrated smart container ports. Tianjin Port Group, Huawei Technologies, the National Supercomputing Center in Tianjin, and CloudWalk Technology, have collaborated to build a smart port featuring an advanced information platform⁶.

(2) Shanghai Port and Ningbo-Zhoushan Port

Shanghai Port is one of the world's largest container ports and is equipped with advanced IT infrastructure, including automated terminals and ship tracking via the BeiDou satellite navigation system. These technologies contribute to efficient commercial logistics during peacetime and can be repurposed in emergencies for military vessel tracking, supply planning, and emergency medical transport. Ningbo-Zhoushan Port serves as a key hub for large-scale bulk cargo such as iron ore, petroleum, and LNG. It facilitates the stockpiling of strategic materials during peacetime and enables their rapid deployment during emergencies.

(3) Hainan Free Trade Policy and South China Sea Strategy

Hainan's free trade policy is viewed as a model that integrates tourism and trade promotion with MCF. The South China Sea is a strategic focal point for China, and ports such as Sanya and Yangpu reportedly feature infrastructure capable of supporting high-speed docks, fuel and munitions storage, and anti-submarine and anti-air surveillance sensors⁷.

These ports support the operations of the PLAN's South Sea Fleet, the China Coast Guard, and maritime militia (fishing vessel flotillas), providing a practical foundation for near-seas defense and far-seas protection. In wartime, they would serve as critical logistical hubs for sea control and sea lane defense in the South China Sea.

(4) Qingdao Port

Qingdao Port is a key hub in northern China that has latent capabilities to support the North Sea Fleet. The Qingdao Administrative Institute, affiliated with the Party School of the CPC Qingdao Municipal Committee, has recommended that the city seize early opportunities to establish a model zone for MCF innovation and to take a leadership role in the development of the port and shipping industries⁸.

The recommendations for building a MCF innovation zone in Qingdao include:

1. construct dual-use berths with large tonnage capacity and lead the creation of a national-level model port cluster for MCF innovation,

2. proactively seek national policy support and translate policy advantages into advantages in standards, financing, and resources, promote deep integration of national and military standards, restructure civilian ships, handling equipment, transport systems, and infrastructure to meet military specifications, and

3. strengthen port service systems--e.g., shore power, supply distribution, energy, and transportation--to ensure reliability and readiness in wartime.

(5) Shenzhen Port and Guangzhou Port

Shenzhen and Guangzhou ports are key international gateways supporting the southern China economic zone. They also serve as potential bases for maritime security and surveillance activities in the waters surrounding Hong Kong and Macau. The development of dock management systems using big data and AI, along with integrated information platforms, not only enhances the efficiency of commercial cargo transport but also has the potential to strengthen military logistics and surveillance capabilities. These technological infrastructures may contribute to tactical supply planning, intelligence collection, and expanded monitoring functions.

The Greater Bay Area (GBA) encompassing Guangdong, Hong Kong, and Macau currently lacks a sufficient number of ultra-large deep-water ports. In response, the Guangdong provincial government has proposed a plan for trilateral cooperation among the three regions to jointly construct an ultra-large international deep-water port zone in the Wanshan Archipelago, located at the mouth of the Pearl River. The proposal aims to fully leverage the unique strengths of each region, capitalize on the benefits of the "One Country, Two Systems" framework, build a new platform for Guangdong-Hong Kong-Macau collaboration, solidify Hong Kong's status as an international maritime center, promote the diversified development of Macao's industries, and comprehensively enhance the GBA's global competitiveness. Additionally, there have been proposals to construct a logistics and resupply base that could support port calls by Chinese aircraft carriers in the South China Sea as part of a broader MCF project. These discussions highlight the dual objectives of bolstering the international competitiveness of large-scale port clusters in the GBA and facilitating both civilian and military applications of port infrastructure⁹.

4. The Belt and Road Initiative and MCF Expansion at Overseas Ports

As part of its Belt and Road Initiative (BRI), China has expanded its port investments across Asia, Africa, the Middle East, and Europe, forming an extensive overseas port network. Notable examples include Pakistan's Gwadar Port, Sri Lanka's Hambantota Port, the PLA's logistics support base in Djibouti, as well as port projects involving China Overseas Port Holding Company and China Merchants Port Group. Officially, these projects are framed as serving commercial and development purposes.

However, these sites possess latent potential for dual use. In Djibouti, China's first overseas military logistics base functions as a refueling, medical, maintenance, and intelligence-gathering hub, significantly enhancing the PLAN's blue-water operational capabilities¹⁰. Other overseas ports can also host Chinese naval vessels and provide resupply under the pretext of ensuring maritime security, counter-piracy operations, humanitarian assistance and disaster relief (HA/DR), or emergency evacuations. These activities may be viewed as extensions of China's MCF development strategy beyond its borders.

While China portrays these efforts as contributions to "the provision of global public goods" and international cooperation, host countries and the international community have voiced concerns. They worry that China may leverage port infrastructure as a foothold to expand regional influence and, in some cases, exert political influence or project military presence. Although the full extent of MCF within China's smart port development remains opaque, its direct links to military readiness infrastructure--including ports capable of supporting aircraft carriers--are drawing heightened international scrutiny and growing alarm.

5. Integrated Reinforcement of Technology, Standards, and Cybersecurity

MCF extends beyond physical infrastructure to encompass technological standards, information systems, and cybersecurity.

In terms of standardization, efforts are underway to integrate and harmonize military and civilian port standards such as those for berthing facilities, cargo-handling equipment, and fuel storage tanks. For example, large container cranes used for commercial cargo in peacetime are increasingly being designed to meet specifications that enable quick conversion for handling military supplies during emergencies.

On the digitization and intelligentization front, technologies such as the BeiDou satellite navigation system, quantum communication, 5G infrastructure, and IoT devices are being integrated into port operations. These systems enable real-time vessel tracking, cargo monitoring, high-precision time synchronization, and secure data transmission. Such systems simultaneously address military demands for anti-jamming and encrypted communications and civilian needs for efficient logistics planning, thereby forming a shared digital infrastructure for dual-use applications.

From the perspective of cybersecurity and intelligence gathering, ports serve as information hubs where maritime logistics and traffic data converge. The construction of shared military-civil information platforms could yield synergies in areas such as counter-piracy, illegal fishing surveillance, and navigation safety.

However, this integration also increases cyber risks. Amid the global trend toward unmanned and IoT-enabled smart ports, China is exporting smart port technologies, including cargo cranes manufactured by Shanghai Zhenhua Heavy Industries (ZPMC). Some experts warn that such Chinese-made systems could serve as potential vectors or targets for network-penetrating cyberattacks¹¹.

In response, Chinese institutions such as the China Academy of Information and Communications Technology (CAICT) and other affiliated think tanks are developing cybersecurity frameworks. Initiatives include adopting cutting-edge cryptographic technologies such as Quantum Key Distribution (QKD) and Post-Quantum Cryptography (PQC) to safeguard both military communications and commercial transaction data¹².

6. International Reactions and Concerns: Geopolitical Implications

As seen above, China's MCF strategy in port development--especially its increasing presence in the South China Sea, expansion into the Indian Ocean, and concentrated port investments in BRI countries--has drawn strategic scrutiny from neighboring states, the United States, and European countries.

The US Department of Defense has raised concerns in its annual China Military Power Report about the potential for overseas military basing by China. Citing Djibouti as a precedent, the report warns of China's growing ability to convert foreign ports for military purposes¹³. Countries across the Indo-Pacific--including India, Australia, and Japan--are also evaluating the risk that China may be establishing infrastructure through its port network to support anti-ship and anti-submarine operations in the Indian Ocean and the Western Pacific¹⁴.

Furthermore, international think tanks and Western media reports often link China's control over foreign ports to "debt trap" diplomacy, raising alarms about sovereignty risks for host nations and broader regional security implications¹⁵.

7. Challenges and Concerns: Internal Issues and International Frictions

(1) Balancing Economic Efficiency and Military Requirements

Transforming ports into dual-use (military-civil) infrastructure entails additional costs related to structural reinforcement, standards unification, and enhanced security. Since private operators prioritize profitability, meeting military specifications may erode profit margins, raising concerns in the commercial sector. An agreement signed in January 2018 between the Ministry of Transport and SASTIND to promote innovation in MCF also highlighted the key challenge: how to optimize the trade-off between long-term national security benefits and short-term economic burdens¹⁶.

(2) Legal Frameworks and Transparency

China has indicated moves to revise legal frameworks such as the National Defense Law and Maritime Traffic Safety Law to clarify the distribution of authority and procedures regarding military use of ports. However, the international community continues to call for greater transparency and accountability. Concerns have also been raised regarding the lack of transparency and ambiguous legal frameworks surrounding China's overseas port infrastructure projects. Addressing these issues could help build trust with foreign investors, coastal state partners, and international maritime bodies such as the International Maritime Organization (IMO).

(3) Environmental and Social Impacts

Port expansion, redevelopment, and smart port transformation under MCF initiatives may cause environmental degradation, disrupt coastal communities, and deplete fishery resources, raising sustainability concerns. Accordingly, international partners and organizations increasingly demand compliance with environmental standards and consideration of ESG (Environmental, Social, and Governance) principles to ensure a sustainable blue economy. Failure to address these issues may lead to international criticism and tensions.

8. Outlook: Policy Coordination and International Communication

If China further deepens the development of MCF ports, several future directions can be anticipated.

First, enhancement of legal and regulatory frameworks is likely. Institutions such as SASTIND and the Ministry of Transport may collaborate to establish more detailed technical standards and legal norms. These would govern the design, operation, conversion procedures, and information-sharing protocols of dual-use ports, potentially alleviating both domestic and international concerns.

The second is engagement in international negotiations and regime-building. China may strengthen its voice in standard-setting and rulemaking by pursuing cooperation in port and maritime transport governance through multilateral frameworks such as the IMO and UNCTAD. Within these frameworks, China could also conduct security and export control dialogues, aiming to ease tensions and build trust.

Third comes strengthening security through the adoption of emerging technologies. Quantum communication, blockchain, and big data analytics not only enhance the cybersecurity of smart port operations but also allow for more transparent information disclosure. If China can ensure such transparency, the international community may gain a clearer understanding of its intentions, which could help to reduce tensions.

Fourth, the political climate of host countries and shifts in international public opinion may require China to manage its overseas port bases with greater caution. Based on precedents set overseas in Djibouti, Sri Lanka and elsewhere, China will likely need to strive to ensure that MCF does not become a flashpoint for international conflict by giving greater consideration to local governments and communities when operating ports in other countries' territories.

Conclusion

The construction of smart port networks is poised to transform global shipping and maritime transport. Within this context, the fusion of China's MCF development strategy and port infrastructure planning is exerting significant influence on the evolving maritime order in the Asia-Pacific, Indian Ocean, and global seascapes. This interplay among domestic and international policy coordination, technological advances, and the shaping of international norms is likely to remain dynamic and evolving.

China's integration of port development with MCF represents a strategic approach that unifies economic growth and national security. It is playing a central role in China's rise as a self-declared "maritime power." Through smart technologies, standardized integration, digitization, and overseas expansion, China's port network is enhancing its sea lane defense posture, global reach, and regional influence. At the same time, these developments risk amplifying distrust and concerns within the international community.

Achieving more sustainable and balanced development will require not only improved legal frameworks and transparency but also inclusive dialogue and collaboration with diverse stakeholders (including local communities) and proactive international communication. In addition to improving its legal institutions and fulfilling its responsibility for transparency, China must also convincingly demonstrate the operational safety, economic benefits, and social value of MCF ports, particularly their potential to contribute to regional development and maritime public goods. Such efforts, pursued through diplomacy and policy dialogue, are essential to reducing international friction. If mutual trust can be built between China and partner countries or local communities even amid intensifying strategic competition--and if practical and effective agreements can be achieved--smart port infrastructure need not become a threat but could instead serve as a platform for regional stability and cooperation.

(This is an English translation of a Japanese paper originally published on January 21, 2025)