This was published by the China-Global South Project on 27 June 2022. China Foresight is affiliated with the China-Global South Project and regularly provides opinion pieces for the weekly IDEAS China-Global South newsletter. Click here to subscribe to the newsletter.
While much of the Western attention is focused on the grey zone activities pursued by Chinese fishing fleets and their purported role in the strategic expansion of China’s interests in the South China Sea, less attention is paid to the development dimensions that are involved in bilateral arrangements between Beijing and its partners.
From Uruguay and Papua New Guinea to Liberia and Mozambique, Chinese-financed port construction and fish factory projects have been accompanied by licensing agreements for access to the rich fishing grounds in the host countries’ surrounding their economic exclusive zones.
Beyond these formalised agreements is documented evidence of illegal, unreported, and unregulated (IUU) fishing by China’s 17,000-strong fishing fleets.
One such case is that of Beira fishing port in Mozambique. Started in 1986, the port was effectively destroyed by cyclone Eline in 2000. The Mozambican government secured a modest $20 million loan from the Arab Bank for Economic Development in Africa and the African Development Bank in 2005, but it only covered 10% of the costs of rebuilding the port.
With only slow progress by the Portuguese firm contracted to do the work, in 2014 the Mozambican government turned to China Exim Bank for a loan of almost $120 million. The construction contract was awarded to China Harbor Engineering Company (CHEC), an experienced state-owned firm in this sector in Africa. The reconstruction project doubled the size of the fishing port, transforming it into the biggest in the country as well as one of the most important in region.
In addition to upgrading and expanding port facilities, CHEC built a fish processing factory and an ice plant. Completed in September 2018, it was handed over to the Mozambican government in 2019 when its revenue generation was expected to begin to recoup the costs of the loan over the twenty-year life of the agreement.
The construction of Beira fishing port was followed by the arrival of several Chinese fishing companies. One is Yu Yi Industries, which secured a 5-year agreement that allows it to use the newly built port as a base for its operations in Mozambique’s Sofala bank.
The severe decline in fish stocks in the South China Seas, decimated in recent decades by over-fishing, forced two ailing fishing companies in Shenzhen to merge to create Yu Yi. Aided by a local Secretary of the Chinese Communist Party, Zhou Jiantou, Yu Yi Industries was part of an effort to “reform our local industrial companies by expanding into new promising industries like distant-water fisheries.”
The arrival in November 2018 of the first consignment of 359 tonnes of fish and crustaceans carried by six Yi Yu vessels from Mozambican waters was greeted with great enthusiasm by the Chinese fishing community in Shenzhen.
This enthusiasm was not shared by the local fishing community in Mozambique. With thirty fishing vessels operating out of the Beira fishing port, China currently is the main actor in the rich waters of the Sofala bank. According to Carta de Moçambique, more than one hundred Chinese fishing vessels were expected to arrive in Mozambique, particularly in the offshore regions outside of Maputo and Beira in 2019.
In April 2019, the same newspaper reported on many irregularities attributed to the Chinese, particularly, fishing during closed seasons, and the use of prohibited fishing equipment, carried out with the complicity of local political elites. Local ship-owners also addressed an open letter to the former Minister of the Sea, Inland Waters and Fisheries in June 2018 complaining about Chinese ship owners’ conduct and non-sustainable fishing practices.
Moreover, local fishermen complained about the growing scarcity of fish in the Sofala bank due to Chinese activities and were fearful that these unsustainable fishing practices will wipe out the once abundant marine life there. It’s worth noting that this situation is not specific to Mozambique and has been reported in many African countries.
Another point of concern regarding the Beira fishing port is its inability to produce sufficient revenue to meet outstanding interest payments due in 2022. This is due to several reasons: while the loan was granted in 2014, the port only started to operate in 2019. And since the handover of the port by the Chinese company in 2019, the port itself is operating only at 30% of its full capacity due to the lack of clients. It was also expected that the port would handle 700,000 tonnes of produce a year; however, today it is around 200,000 tonnes/year, due to lack of demand.
The local processing plant stands virtually idle, as Chinese fishing vessels are still exporting their catch unprocessed and the new ice plant which was expected to produce 60 tons/day is only producing 5 tons/day. This led to fears among some Mozambicans that if the loan is not paid, the Chinese will seize the port.
Though the latter is unlikely, nevertheless the problem of debt repayment for port infrastructure and the concurrent uncontrolled depletion of marine resources continues to haunt Chinese involvement in this sector. Indeed, Chinese fishing fleets are expanding catches beyond offshore sites into the southern Pacific and, most recently, the Indian Ocean.
The combination of state subsidies, loans, and political connections has enabled this industry to prosper despite the woeful collapse of offshore fishing stocks. Unlike areas such as the Galapagos Marine Reserve where the Chinese fishing fleet typically turn off mandatory transponders to disguise their whereabouts, in the waters off of Mozambique the fishing vessels operated openly and with impunity.
Facing growing criticism, the Chinese government announced a voluntary moratorium on fishing in the southern Pacific and the northern Indian Ocean in May 2022 that, as pointed out by NGOs, coincided with the end of the local fishing season.
For countries in the Global South, these unsustainable fishing practices by the Chinese fishing fleet represent the potential for destruction of local livelihoods and communities.
This article gives the views of the authors, and not the position of the China Foresight Forum, LSE IDEAS, nor The London School of Economics and Political Science.
The blog image, “China Fishing Festival 2“, is licensed under CC BY-SA 3.0.