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1 INTRODUCTION

China Merchants Group (CMPort) is a prominent port

enterprise that has implemented an

internationalization strategy for land-port system

planning. Its Shekou model, known as "Port-Park-

City" (PPC), has achieved remarkable success within

China. In alignment with the Maritime Silk Road

Advocacy, CMPort has extended the application of

the PPC model to countries participating in the Belt

and Road Initiative during overseas investments. This

study aims to explore the viability of replicating the

PPC model overseas by analyzing two representative

investment cases: the China- Belarus Industrial Park

(GSIP) and the Djibouti Port Industrial Park, which

exemplify China Merchants Port Group's overseas

port investments.

Drawing upon the concept of the coupling effect

theory, this paper investigates the common

characteristics of the PPC model's application in these

cases, focusing on node radiation and regional-port

linkage. By examining the replicability of the PPC

model in overseas investments, this study sheds light

on the essence and logic behind its success. The PPC

model serves as a natural link fostering economic,

trade, and cultural exchanges among countries along

the ocean.

Among the port enterprises participating in the

Belt and Road Initiative, CMPort has achieved notable

success. With 53 ports in 20 countries and regions

worldwide, CMPort has begun replicating the

domestic PPC model overseas, reaching the practical

stage. Notably, China-Belarus Industrial Park,

Djibouti International Free Trade Zone, Colombo Port

Sustainability and Global Replication of the PPC Model:

A Coupling Effect Perspective on Chinese Port

Enterprises' Overseas Development

J. Shao

, W.J. Li

& Y.H. Tian

Qingdao University, Qingdao, Shandong, China

Florida International University, Miami, FL, USA

ABSTRACT: The imperative to harmonize economic growth with environmental preservation has catalyzed

transformations in strategic management in current global landscape. The "Port-Park-City" (PPC) model,

epitomized by the success of China Merchants Group Port (CMPort), offers a compelling case of how strategic

sustainability revolutionizes international business. This research probes the innovative PPC model, initially

thriving within China, to assess its adaptability to international investments. Through a meticulous analysis of

two pivotal investment cases—the China Belarus Industrial Park (GSIP) and the Djibouti Port Industrial Park—

we investigate the replicability of the PPC model and its capacity to confer a sustainable competitive edge.

Adopting a "coupling effect" perspective, we scrutinize commonalities in PPC model implementation in these

cases. This research address the pressing demand for global enterprises to adapt to evolving paradigms of

strategic management. Our findings underscore the PPC model's potential not only in bolstering business

success but also in advancing global sustainability, fostering competitive advantage, and catalyzing business

model innovation. This encapsulates the essence of sustainable strategic management.

http://www.trans

nav.eu

the

International Journal

on Marine Navigation

and Safety of Sea Transportation

Volume 18

Number 3

September 2024

DOI: 10.12716/1001.18.03.2

672

in Sri Lanka, and Hambantota Port have exemplified

the trinity PPC model. This investment approach,

involving the port as the initial phase, followed by the

establishment of industrial parks and the

development of supporting cities, aligns with the

development needs of countries along the Belt and

Road route, making it a primary mode for future

overseas investments by port enterprises.

The establishment of the 21st Century Maritime

Silk Road signifies a new trade route connecting

China with the world within a changing global

political and trade landscape. This initiative's core

value lies in its ability to enhance transportation

channels and strategic security, particularly

considering China's position as the second- largest

global economy. Expanding the "Sea Silk Road" is

instrumental in bolstering China's strategic security

(Tao et al., 2019; Wang, 2019).

As vital nodes and carriers of the Belt and Road

Initiative, Chinese port enterprises actively pursue

internationalization strategies and participate

extensively in investment projects along the route

(Feng et al., 2019; Afonasieva, 2018; Terry, 2019).

Chinese ports have established air links with over 600

major ports in 200 countries, and Chinese port

enterprises have engaged in the construction and

operation of numerous ports worldwide. For instance,

Qingdao Port has established 22 overseas-friendly

ports across Asia, Europe, Africa, and the United

States. Shanghai Port Group's investment in

Zeebrugge Wharf Company of Belgium secured the

franchise rights for Haifa New Port Wharf in Israel for

25 years. Hebei Port Group officially registered

Indonesia Qin Hai Port Co., Ltd. to facilitate the

comprehensive international port project of Jambei

Iron and Steel Industrial Park in Indonesia.

However, port projects are complex and

comprehensive endeavors that necessitate a high

degree of internationalization for both investors and

host countries. Many countries along the "Sea Silk

Road" face challenges such as an imperfect policy and

legal environment due to their economic development

level and limited supporting infrastructure.

Furthermore, China's port projects, characterized by

substantial transaction volumes and numerous sub-

projects, expose port enterprises to various

uncertainties and complex risks during overseas

investments (Jin et al., 2021; Huo et al., 2019).

Therefore, analyzing the offshore investment

environment of port enterprises and evaluating the

feasibility of replicating the PPC overseas

development model is a common challenge faced by

port enterprises in their overseas endeavors. This

paper aims to address this issue from the perspective

of the coupling effect.

To achieve these objectives, this study selects the

China-Belarus Industrial Park (GSIP) and Djibouti

Port Industrial Park as two representative cases of

China Merchants Port Group's overseas port

investments. By analyzing the common features of

PPC model application in these cases, particularly in

terms of node radiation and regional-port linkage, we

assess the replicability of the PPC model in overseas

investments and provide insights into its underlying

essence and rationale.

This study contributes to extend beyond

theoretical speculation, offering a pathway for port

enterprises to navigate the challenges of overseas

investments strategically and successfully. First, this

study significantly advances the understanding of

port internationalization strategies within the context

of the Belt and Road Initiative. By investigating the

replicability of the Port-Park-City (PPC) model in

overseas investments, this paper extends beyond the

realm of theoretical frameworks and provides

practical insights that resonate with the experiences of

port enterprises and policymakers. This practical

orientation is crucial in the face of complex challenges

and uncertainties that accompany overseas port

investments. Moreover, the integration of the

coupling effect theory into the PPC model analysis

represents a novel analytical approach that

contributes to both theoretical discourse and practical

applications. By shedding light on the commonalities

of the PPC model's application in two representative

investment cases – the China-Belarus Industrial Park

(GSIP) and Djibouti Port Industrial Park – this paper

bridges the gap between theoretical constructs and

real-world outcomes. This nuanced examination

enhances the potential for replicability by pinpointing

strategic considerations, operational patterns, and

success factors that resonate across diverse contexts.

2 THE DEVELOPMENT AND

INTERNATIONALIZATION STRATEGY OF

CHINESE PORT. ENTERPRISES UNDER THE

"MARITIME SILK ROAD" INITIATIVE

The " Port" in PPC refers to investing in the

reconstruction of existing ports or the development

and construction of new ports, starting from the

transportation hub, and gathering logistics. The "Park"

is building and operating an industrial park on the

spot, relying on industrial real estate and rejuvenating

the country with industry. "City" means to develop

supporting people-oriented urban commercial and

achieve sustainable development. The key of the PPC

model is to create a sustainable development

ecosystem, with ports taking the lead and industrial

parks following up and supporting urban function

development so as to achieve the integration and

coordination of ports, industries, and cities. The PPC

mode derives from CMPort's 30 years of experience

developing Shekou Industrial Park. Investment is not

limited to ports but includes industrial parks and

cities, enabling mutual interaction between ports and

urban areas. The concept of PPC has been applied to

some international port projects, as well as the

development of industrial parks near the port (Liu et

al., 2020). An example of applying the "Shekou" model

in foreign ports is the Djibouti Free Trade Zone

investment project (CMPort Port, 2017) conducted by

CMPort, Dalian Port, and the Djibouti government.

Besides, CMPort also participated in the Build-

Operate-Transfer (BOT) project of a deep-sea port and

industrial park in Kyaukpyu Special Economic Zone

in Myanmar and the project of Bagamoyo Port and

Special Economic Zone in Tanzania. The PPC concept

is also applicable to two projects in Malaysia in which

local port groups are involved, namely the Malaysia

China Kuantan Industrial Park (MCKIP) and the

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Malacca Gateway Port Project. These projects promote

regional economic growth through the comprehensive

development of Port Park City, aiming to bring more

shipping demand. The PPC model includes

developing ports first and then building industrial

parks. Some people believe that this "may lead to the

establishment of a Chinese agency city in another

sovereign country" (Pauley and Shad., 2019). Those

who are optimistic point out that industrial parks

with special economic or free trade zones will increase

trade and investment, which can be used to recover

the cost of infrastructure development.

Under the situation of slow global economic

growth and weak growth momentum of the

traditional port economy, the "Maritime Silk Road"

initiative has opened a road of internationalization for

Chinese port enterprises, and international

cooperation in ports has yielded rich results. (Wang

and Wu, 2018) advocated taking the construction of

China ASEAN ports as the hub and opportunity to

jointly build a "maritime port network" and establish

a multi-level exchange mechanism, information

sharing mechanism, and port city cooperation

mechanism (Yu et al., 2017. Vangeli and Anastas,

2017). Chinese enterprises have strengthened their

investment layout in overseas ports through mergers

and acquisitions, franchising, joint ventures, and other

forms. The new investment mode of "integration of

port, industry, and the city" has gradually become a

new business card for Chinese port enterprises to go

global (Cheng, 2016; Du and Zhang, 2018). PPC mode

investment is different from general port investment.

It is a comprehensive investment and development

mode with ports as radiation nodes, district port

linkage, and centralized development taking root. The

strategy of the PPC mode is to focus on regions,

deepen urban cultivation and transform development.

That is the comprehensive development mode of port,

industry, and city, which is carried out so as to

achieve the overall linkage development of the whole

area (Liu, 2016).

Chinese enterprises play one of two main roles in

overseas ports. In some projects, they are contractors

whose responsibilities include design, procurement,

construction, commissioning, and handing over the

project to the end-user or the owner contract

according to the engineering, procurement, and

construction In many cases, the Export¬Import Bank

of China provides export buyer credit to the host

country or other types of contracts, such as

construction, operation, and transfer (BOT) and

investment models, including joint ventures and

mergers and acquisitions (M&A), are used by Chinese

enterprises to own and operate foreign ports. In many

cases, these ports are joint ventures with public or

private entities in the host country. Almost all Chinese

enterprises involved in overseas port investment are

state-owned enterprises. The vast majority of port

projects are undertaken by a few state-owned

enterprises owned by the central government of

China, and state-owned enterprises in some provinces

and cities are also active. Only one private enterprise

participated in an overseas port project (Landbridge

Group in Shandong Province) (Liu and Schindler,

2020).

CMPort also participated in the BOT project of a

deep-sea port and industrial park in Kyaukpyu

Special Economic Zone in Myanmar and the project of

Bagamoyo Port and Special Economic Zone in

Tanzania. The PPC concept is also applicable to two

projects in Malaysia in which local port groups are

involved, namely the Malaysia China Kuantan

Industrial Park (MCKIP) and the Malacca Gateway

Port Project. These projects promote regional

economic growth through the comprehensive

development of Port Park City, aiming to bring more

shipping demand. The PPC model includes

developing ports first and then building industrial

parks.

3 A CASE STUDY OF THE PPC MODEL BASED

ON THE COUPLING EFFECT.

The coupling effect, also known as the interaction

effect and linkage effect, refers to the phenomenon

that two (or more than two) systems or forms of

motion influence each other through various

interactions. According to this concept, two

independent and interrelated systems-industrial park

and port city-it are in line with the logic of the

coupling effect. On the one hand, industrial parks

have brought more economic growth and

employment opportunities to port cities. On the other

hand, a port city has a vast hinterland, labor force,

and urban services to the industrial park. This paper

selects two typical investment examples of the China-

Belarus Industrial Park (GSIP) and Djibouti Port

Industrial Park, which are representative of overseas

PPC investment of China Merchants Port Group, to

design a case study. Based on the coupling effect, this

paper analyzes the case and discusses the

effectiveness and replicability of the comprehensive

investment and development model of regional and

port linkage, centralized development, and rooting.

3.1 Case 1: China-Belarus Industrial Park (GSIP)

3.1.1 Investment background and overview

Great Stone Industrial Park (GSIP) is located in

Minsk, Belarus, an essential hub of the Silk Road

Economic Belt that runs through Europe and Asia.

With a planned area of 91.5 square kilometers, it is a

landmark project of the Silk Road Economic Belt

jointly built by China and Belarus. GSIP is the largest

special economic zone in Belarus. The park is located

in Moljevic District, Minsk State, the Republic of

Belarus, 25 kilometers away from Minsk, the capital of

Belarus, and adjacent to Minsk International Airport,

railway, and Berlin-Moscow trunk roads (E30

European Highway and E28 European Highway).

GSIP is close to the main transportation trunk road,

and a railway line connects Belarus and Lithuania,

which are 500 kilometers away from each other, and

Klay Pether, the Baltic port of Lithuania. The primary

industrial orientation of the park is a high-tech

industrial park focusing on machinery manufacturing,

electronic information, fine chemicals, biomedicine,

new materials, warehousing, and logistics. There are

production and residential areas, offices, commercial

and entertainment complexes, and financial and

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scientific research centers planned in the park (Shi

and Wang, 2019. Zhao, 2017).

GSIP has specially formulated the "1234" scheme

during the construction: that is, around "the belt and

road initiative", connecting two areas (the European

Union and the European Union), connecting three

points (GSIP/Lithuania's Kaunas Free Trade

Zone/Klaipetta Port in the Baltic Sea), and integrating

four flows (road/railway/aviation/maritime logistics)

to build GSIP into a critical hub radiating the Eurasian

market. During the construction of GSIP, CMPort

communicated with the Belarusian government

deeply and was invited to participate in the revision

and improvement of the logistics industry planning of

Belarus (2016-2020). Taking eco- environmental

protection as the main task of the park development,

GSIP built investment projects in the negative list

system and formally issued the "Regulations and

Implementation Methods of Eco-environmental

Protection Management in China- Belarus Industrial

Park."

For Belarus, although China is a competitor in

some areas, in most areas, the advantages of domestic

production instead of imports through cooperation

with China outweigh the disadvantages. Especially

compare to western countries' sanctions and various

political standards, Belarus is more inclined to

cooperate with China which does not have such a

high political standard as westerns (Liu et al., 2021). In

addition, according to the EAEU agreement, GSIP can

help Belarus take advantage of the opportunity of tax-

free access to the market of 170 million people, thus

expanding its own economic benefits. For China, GSIP

itself is a platform to support China's foreign direct

investment and access to foreign markets, and it can

help China companies lacking foreign direct

investment experience to go global collectively.

Providing a perfect and localized modern

infrastructure system in the park could promote the

positioning of enterprises, produce an agglomeration

economy, and support the transfer and diffusion of

knowledge. Once China starts to develop the park

overseas, China enterprises can go global as a group

(Brautigam and Tang, 2014. Liu and Wang, 2020).

China Investment Zone not only provides

opportunities for infrastructure investment in China

but also plays a synergistic role between China's

manufacturing capacity and partner countries'

economic development strategies as China enterprises

"go global". Therefore, GSIP was first put forward by

the Belarusian President, but with the implementation

of BRI in China, its development speed has been

rapidly accelerated. In 2015, given Shekou's

experience, CMPort carried out a series of impressive

and efficient industrial construction. CMG announced

it would invest USD 500 million in GSIP to build a

trade and logistics sub-park.

3.1.2 Investment effect based on the perspective of the

coupling effect

GSIP's investment has a positive coupling effect

with the local area. First, GSIP has a very intuitive

economic and social coupling effect with the local

area. Minsk has a population of 1.9 million, of which

450,000 are highly educated. It provides a good

market hinterland and a productive labor force for

local GSIP. The economic performance of Belarus is

better than that of many other transition economies.

Between 1989 and 2019, Belarus's real gross domestic

product (GDP) increased by 1.96 times, which far

surpassed Georgia and resource-rich Ukraine, which

experienced the color revolution. Second, GSIP also

provides local economic and social benefits. At

present, the first batch of enterprises that signed the

settlement agreement has brought a total investment

of 2 billion dollars to the local area. According to

Xinhua News Agency, GSIP is expected to attract 200

enterprises and bring 120,000 local jobs in the future.

The economic benefits generated by the park are in

line with the development goals of Belarus. Belarus

has successfully maintained a significantly different

social model from other European economies in

transition and attaches great importance to its citizens'

full employment and high social security

(Yarashevich, 2014).

Furthermore, GSIP provides such a broader

market hinterland coupling effect for the local area:

Minsk, as a logistics hub of Europe and Asia, brings

GSIP a general hinterland market, which in turn

strengthens the importance of Minsk as a logistics hub

in the international network of urban areas. A new 15-

day railway line has crossed Eurasia, connecting

China with western Europe (including Lodz in Poland

and Duisburg in Germany) through Belarus. It is

estimated that, if there is no epidemic situation, the

container transportation volume on the China-EU

route can increase from 260000 TEU (standard 20-foot

container) in 2018 to about 500,000 TEUs in 2020, and

it will reach 1.3-2 million TEUs in the long run, and

the transportation revenue per 1 million TEUs will be

about 2.75 billion USD (Lissovolik and Vinokurov,

2018. Lobyrev et al., 2018). Meanwhile, EAEU

(Eurasian Customs Union), a subsidiary of Belarus,

provides GSIP with a tariff-free market hinterland

with a population of 170 million. Based on more

convenient transportation with the economic

hinterland, the development of GSIP is conducive to

helping the local area better seize the opportunity to

enter the hinterland market. With the end of the

COVID-19 epidemic, similar to the PPC model in

Shenzhen, GSIP will have more opportunities to use

convenient railway transportation to sell its products

to Asia and other European countries, thus bringing

more economic growth and solving social

unemployment in Minsk.

Moreover, GSIP also brought the coupling effect of

scientific and technological progress to Minsk. GSIP

has a positive scientific and technical linkage with the

city. First, it has attracted many high-tech enterprises

to enter the local area. Local services (capital

functions) and economic hinterland are conducive to

creating a good environment for GSIP, thus enhancing

its attractiveness to enterprises. According to Xinhua

News Agency, Huawei, ZTE, China Telecom,

Zhonglian, Zhongke, and other enterprises have made

it clear that they will stay in the park (great stone,

2021). Chengdu Capacitance R&D Center, Gansu

Juxin Malt Production Base, Nano Pectin Production

Center, and other bilateral cooperation research

centers started project construction in 2015 (Ren,

2016). With the improvement of the project, the

industrial park will inevitably increase the

competitiveness of local science and technology.

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Second, to improve GSIP, China also proposed

investing in the communication infrastructure of GSIP

on a large scale. Communication infrastructure could

increase connectivity along a series of axes connecting

major cities, while economic development zones will

serve as cooperation platforms and create conditions

(investor gardens) for subsequent industrial, trade,

and commercial expansion. GSIP is located in the

northern BRI economic corridor across Kazakhstan,

Belarus, Poland, and Germany, and Belarus occupies

a strategic position on the border between EAEU and

the EU. At present, not only is this route the fastest

but also safer than the southbound Caucasus and

unstable Ukraine (Liu et al., 2021). According to

People's Daily Online, China Unicom has settled in

GSIP and actively participated in constructing smart

parks and smart chemical plants. In this case, to

support the development of GSIP, the communication

enterprises settled on not only improving the park's

communication but also promoting the development

of local communication technology and

communication services. For example, China Unicom

indicated that it would speed up the development of

its business in Eastern Europe and along the belt and

road initiative, provide customized information and

communication services for customers' pain points

through deeper communication with local enterprises,

and become a trusted and reliable partner for

customers (Wu, 2021). In the GSIP case, the

investment effect based on the coupling effect

perspective is noticeable, good expected returns have

been achieved, and the future prospect is also worth

expecting.

3.2 Case 2: Djibouti Port Industrial Park

3.2.1 Investment background and overview

Djibouti is a port country located in the corner of

East Africa and can effectively radiate to most areas

such as North Africa, Central Africa, and East Africa,

covering hot spots such as Sudan, South Sudan,

Somalia, and Congo (DRC). Djibouti port has a unique

geographical advantage, as if is one of the most

important ports in Africa, and connects Asia, Africa,

and Europe. First, Djibouti guards the entrance of the

Red Sea, which is the passage connecting the Indian

Ocean and the Mediterranean Sea and the "throat" of

the Suez Canal. The annual throughput of ships

passing through Djibouti is close to 20,000, and the

total cargo exceeds 1 billion tons, accounting for 1/3 of

the global total. In addition, Djibouti is currently the

only seaport in Ethiopia. In recent years, Ethiopia's

economy has proliferated, with a population of over

100 million, and the market demand for food, oil,

consumer goods, and manufactured goods is

enormous. Ethiopia is a landlocked country, and its

relations with other countries bordering the northeast

and southeast have been tense for a long time,

Ethiopia can only use Djibouti as its shipping and

trade gateway. Despite living in a port with excellent

natural conditions, Djibouti's independent

development ability is very low, which is mainly

manifested in the scarcity of production factors such

as material capital, labor skills, and management

experience, which restricts the economic and social

development and makes the local area fall into the

trap of low-level equilibrium (Brass, 2008). As one of

the least developed countries declared by the United

Nations, Djibouti's industrial base is fragile. More

than 95% of domestic agricultural products are

imported, and more than 90% of infrastructure needs

foreign aid.

Until 2009, Djibouti still used an old port built

during the French colonial period in 1896, namely,

Djibouti International Free Port PAID (Port Autonome

International de Djibouti), which is a statutory public

institution. Under the attribute of integration of

government and enterprise, the so-called

"international port" has a very low operating

efficiency, and its facilities and equipment are aging.

No matter from the perspective of hardware facilities

or software environment, the old port can't support

the sustainable development of Djibouti, and the

demand for port upgrading is increasing. However,

Djibouti needs the technical level and capital strength

to upgrade its port independently, so it is the only

choice to introduce foreign capital. In 2009, with the

cooperation of Dubai World and the local

government, Djibouti Port won the most advanced

DCT container terminal in Africa. However, hardware

technology's improvement has yet to enhance fully

the vitality of local ports and the economy.

In 2012, CMPort invested USD 185 million to

acquire a 23.5% share of Djibouti Port Company. In

2014, it proposed to transform and upgrade the

original port and build a new one 5 kilometers away

from the old one. At the same time, CMPort invested

in the joint construction of the Dorhalle Multi-

function Port (DMP) and Djibouti International Free

Trade Zone with an area of about 48.2 square

kilometers with the Djibouti government and carried

out urban development of the old wharf plot. The

Djibouti Free Trade Zone project is divided into two

project companies: asset company and operated

company. Kyrgyzstan dominates the asset company,

and China dominates the operating company. CMPort

has brought a new port-city coupling effect to

Djibouti- CMPort, and the Djibouti government has

further reached an intention to cooperate in the

construction of a free trade zone, and gradually

copied the PPC model in Djibouti¬an international

port city with modern port facilities and modern

operation concepts has steadily taken shape. "Port"

refers to the completion of the new Djibouti Doraleh

Multi¬Purpose Port in 2017. "Park" refers to the

completion of the Djibouti International Free Trade

Zone, a new free trade zone, in 2018. "City" refers to

the transformation and development of Djibouti's old

port into a CBD business new city. In April 2019,

CMPort signed the Framework Agreement for Project

Cooperation with Djibouti, and the project personnel

has been stationed in Djibouti to work in an all-

around way.

3.2.2 Investment Effect from the Perspective of Coupling

Effect

The PPC model has brought a positive coupling

effect to Djibouti. First, the construction of ports and

industrial parks has simultaneously promoted the

modernization of urban areas. After taking a stake in

Djibouti port, China Merchants first thought that the

development space of Djibouti's old port had reached

its limit, and it was not the best choice to continue

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upgrading the port at the original site. Therefore, it

put forward the idea of returning the port to the city,

positioning the area where the old port is located as a

CBD business functional area, and the urban

transformation and port-park supporting construction

based on the old port began. In September 2018,

China Merchants and Djibouti Government formally

signed the "Reconstruction Project of Djibouti Old

Port: Memorandum of Understanding on

Cooperation", giving full play to China Merchants'

professional advantages in the comprehensive

development and operation services of cities and

parks and on this basis, the old port was urbanized

and redeveloped, focusing on the development of

commerce, logistics, finance, hotels, tourism, and

other industries. Currently, the urbanization

transformation industry of the old port has achieved

initial results (Ji and Li, 2019).

Second, the local area also provides the labor force

needed for te development of the port and the park. In

2020, Djibouti had a population of 988,000, of which

70% live in cities, and 650,000 live in the capital

Djibouti, providing intensive and sufficient labor for

the construction of ports and parks. In addition, the

local labor price is also very competitive. In 2010, the

per capita GDP was about $1,000, which benefits the

deployment of labor-intensive industries in ports and

parks. Currently, the minimum wage in Djibouti is

about 40,000 Geelong/month (about 226 US

dollars/month), and the per capita GDP in 2020 is

about 3,425 US dollars. Not only that, the new port

has brought more economic benefits to Djibouti and

provided more jobs. According to relevant data, the

port logistics service industry alone has provided

3,000 jobs. With the training of China enterprises,

Djibouti also has a lot of technical talents, which

makes up for the need for more relevant technical

talents in China.

Third, developing industrial parks has also

brought positive industrial agglomeration effects to

the local area. In November 2016, China Merchants

Group jointly signed the Djibouti Free Trade Zone

Project Investment Agreement with Dalian Port,

Djibouti Port, and Free Trade Zone Administration.

After the opening of the FTZ, the FTZ has focused on

the development of logistics (transportation, bonded

warehousing and distribution), commerce (bulk

bonded goods trading, commodity display, duty-free

goods retail), and processing and manufacturing

(packaging production, light processing of materials

and food processing). At present, 66 registered

enterprises have been welcomed, and the occupancy

rate of the park has exceeded 88%, which has caused a

situation that the demand exceeds the supply. At

present, four industrial clusters have been formed:

logistics industry cluster, commerce industry cluster,

export manufacturing cluster, and export

manufacturing cluster. According to this trend, after

the project development is completed in 2045,

Djibouti Free Trade Zone is expected to become one of

the largest free trade zones in Africa, and it is

expected to create as many as 200,000 jobs, which is

self-evident for Djibouti with a population of only

over 900,000. In addition, the large-scale engineering

contracting projects undertaken by China Company

include the Djibouti section construction project of

Djibouti-Ethiopia Railway, the Djibouti-Ethiopia

cross-border water supply project(Phase I), the multi-

functional dock construction project of Dohere, the

salt export dock construction project of Asare Salt

Lake, and the project exhibition area of East Africa

International Business District. After having the

Djibouti-Ethiopia Railway, Djibouti's port advantages

immediately appeared, and the economic benefits

displayed began to affect neighboring countries. The

establishment of the Djibouti International Free Trade

Zone has enabled Djibouti to maximize its port

advantages. With the port construction project,

Djibouti, as the future "Dubai in East Africa", will also

undertake more import business when the port is

gradually completed, especially for some inland

countries in East Africa. To sum up, the investment

effect based on the perspective of the coupling effect,

in this case, is noticeable, and it has achieved good,

expected returns, and the future prospect is also

worth expecting.

3.3 PPC model closely combines economic coupling with

strategic coupling

First, from the case of the China-Belarusian Industrial

Park, it can be concluded that the logic of the

replicability of the PPC model is mutual benefit and

win-win. China's cooperation model is to seek

relations with other sovereign entities which are

mutually beneficial (win-win), conducive to equal

relations, and include the ownership and

responsibility of partners (Dunford and Liu, 2019). For

China, intergovernmental development projects

(industrial parks) with Belarus are significant in

strengthening economic, trade, and political

cooperation and providing a platform for overseas

investors in China (Liu and Dunford, 2021).

Belarusian local elites are also willing to cooperate

with the China Industrial Park project for their benefit

(Hutchinson and Yean, 2021). Since COVID-19, the

economies of all countries in the world have been

affected to varying degrees. The conflict between

Russia and Ukraine continued to ferment, and the

United States imposed severe sanctions on Russia.

Because of the relationship between Belarus and

Russia, Belarus was also listed as the target of

sanctions by the United States, Canada, Britain, and

other countries. However, none of this has affected

the general direction of win-win cooperation between

China and Belarus. In April 2022, a video conference

held the fourth round of negotiations on the

Agreement on Trade and Investment in Services

between China and Belarus. The two sides exchanged

in¬depth views on investment, specific service trade

chapters, electronic commerce, and other chapters,

and worked out the next work plan. In July 2022, the

e-commerce opening ceremony of the "Belarus

Pavilion" was held in Zhongbai Industrial Park, and

Belarusian goods were officially sold through the

account of "Belarus Pavilion" on the China e-

commerce platform. The First Deputy Prime Minister

of Belarus delivered a video speech, saying that

Belarus was one of the first countries to respond to

and participate in the "belt and road initiative" Belarus

and China cooperated to build the "belt and road

initiative" landmark project and the demonstration

project and built a perfect platform for further

expanding cooperation between the two countries.

677

Second, from the case of Djibouti Port Industrial

Park, the logic of the replicability of the PPC model is

still a mutual benefit and win-win. Through the

implementation of the PPC model, China Merchants,

together with Djibouti, has gradually turned it from a

single country with a high dependence on ports into

an "East African Shekou" integrating a regional

shipping center, trade logistics center, and

information finance center, which has also brought

Djibouti brand-new development opportunities.

Djibouti Prime Minister Kamil once said that Djibouti

Free Trade Zone "will affect the country's

transformation in the next few years". He said:

"Djibouti International Free Trade Zone has a great

influence on the people of Djibouti. The free trade

zone drives economic growth and creates many

employment opportunities and becomes an important

lever for Djibouti's economic development." And

Djibouti's cooperation with China continues. In 2018,

Djibouti International Free Trade Zone, invested by

China, was officially put into operation, and more

than 70 enterprises settled in one year. By 2022, more

than 190 enterprises will have settled in. According to

the report of an international consulting company,

after the free trade zone is fully developed in the

future, it is estimated that the total GDP will reach 4

billion US dollars, and more than 100,000 jobs will be

provided, which also means that more Djiboutians

will get rid of their current living conditions and

usher in the dawn of life.

Third, for enterprises in China and China, the

positive effect of copying the PPC model overseas on

China is to open up and consolidate the belt and road

initiative, which is conducive to more China

enterprises going abroad. After establishing a

comprehensive park with PPC mode, it will provide a

dense and localized modern infrastructure system,

promote the common positioning of enterprises,

generate an agglomeration economy, and support the

transfer and diffusion of knowledge. Once China

started to develop parks overseas, China enterprises

would go global through groups (Brautigam and

Tang, 2014). The PPC model is a ready-made template

that has been exported to all parts of the world. It

provides investment opportunities for a series of

state-owned enterprises not directly engaged in

financing, construction, or operation of ports. We

believe that Shenzhen's "port-industrial park-city"

model provides information for the port development

of the central government and local state-owned

enterprises. This model is an overall spatial planning

method to balance internal interests-regional and local

connectivity. As a whole, it impacts regional

development. We believe that the PPC model

promotes the "strategic coupling" between sub-

national regions and global value chains anchored by

leading enterprises in China (Liu and Schindler, 2020).

Fourth, for local investment cooperation, China

Investment Zone not only provides opportunities for

China to invest in infrastructure but also plays a

synergistic role between China's manufacturing

capacity and the economic development strategies of

partner countries as China enterprises "go global"

(Yang et al., 2020). The experience of CS-SIP

(Singapore, China) shows that even in the case of

slight cultural and language differences, joint projects

may not develop smoothly, and overseas parks may

need to meet expectations. China's preferential loans

and credit lines do not need political and

macroeconomic reforms in the host country. By

accepting China's international economic

development goals, Belarus has strengthened

diversified international partnerships, improved its

domestic infrastructure and international

connectivity, and strengthened its economy (Dunford

et al., 2021. Chen et.al., 2022). Judging from the

cooperation projects that have been promoted, both

governments have provided convenience for the

replication of the PPC model. For example, Belarus

has simplified the usual cumbersome bureaucratic

procedures, and in order to improve institutional

performance, China has provided short-term training

courses for Belarusian officials. In addition to

supporting the infrastructure construction of the park,

the China Municipal Government has also guided and

encouraged China enterprises to settle in the park in

various ways and invested much energy to strengthen

the interconnection between China and Belarus

Industrial Park and the outside world, such as

introducing Liu and Dunford (2021). Since joining

CAREC in 2010, Pakistan has implemented several

policies to make their port a gateway for maritime

trade of CA countries (including China's XUAR), such

as developing Gwadar Port and investing in CAREC

Corridor and infrastructure along CPEC (Shibasaki et

al., 2019).

4 IS THE PPC MODEL REPRODUCIBLE?

4.1 The essence of PPC overseas development model

China's PPC model is essentially a form of

government substitution, and it is a unique zone

model authorized and controlled by the government,

which was born in a relatively backward area, and the

comprehensive ability of the government is relatively

weak. It is an attempt by the provincial government to

authorize enterprises to build a platform of

integration or cooperation between government and

enterprises, market- oriented operation, and rapid

manufacturing of growth poles. The most significant

difference between this platform and the current

urban investment mode is that the level and scope of

authorization are different. The difference between

the PPC model and other similar government

authorization platforms is that Shekou has started a

five-in- one development model with economic

construction as the center, politics, society, culture,

and natural ecosystem, and it is not a big park or real

estate model in which industries are isolated and

deep.(Please find Figure 1) PPC mode has realized the

organic integration and coordinated development of "

Port, Park and City". The story of the port has brought

great convergence of economic factors and critical

factors of urban development and promoted the

formation of the port economy with continuous

aggregation and circular development of people flow

and logistics. The logic of the PPC mode is to

construct an ecological circle mode of sustainable

development.

678

Figure 1. Shekou PPC Model

When the PPC mode expands overseas with China

port enterprises, its manifestation has changed

compared with that in China, but its essence and logic

are similar. First, PPC and centralization; PPC mode is

reasonable from the perspective of space. From

Rotterdam to Hong Kong, port cities all over the

world conform to this basic logic. The former port is a

process of centralization, which is also in line with

Christelle's central place theory. Port changed the

centrality of the port it invested in, which made it the

reason to gather resources and follow the market,

traffic, and administrative principles to develop

orderly. Second, the central organizer and

co¬governance; the governance system is the soul of

the PPC model. The most significant advantage of

joint governance is that it can take care of the main

demands of stakeholders. In the stakeholder

governance model, the platform company has always

played the role of organizer. Because they advocate

promoting social progress with commercial success,

they are both investors and important participants

who can participate in the local governance system.

This means they can better balance the demands and

interests of all parties. In the process of taking root

and sprouting overseas, the PPC model develops

society, culture, politics, economy, and natural

ecology together.

5 APPLYING PPC MODAL TO OVERSEAS

INVESTMENT

The replicability of the PPC modal in the host country

depends on local strategy, economic benefit, and

cooperation concept. First, the key to realizing the

strategic coupling effect of the PPC modal is whether

the PPC investment scheme can meet the strategic

needs of the host country. In addition to economic

attributes, many ports have high strategic value

because they function as a geo-transportation hubs.

For the host government, ports with significant

geographical advantages are often the focus of policy

support. Suppose the PPC investment scheme is more

aligned with the local strategic policies. In that case, it

will be more conducive to implementing the PPC

model and promoting the host country's strategic

interests through the coupling effect. In particular, the

PPC modal has more opportunities to be applied in

underdeveloped countries along the BRI. The reason

is that these countries need more capital and

technology, so they need to rely on the power of

foreign investment to improve their strategic needs

and realize the value of transportation hubs. As

mentioned above, the PPC modal can realize strategic

and economic value through the coupling effect.

When investing in these countries through the PPC

modal, if the investment can meet the local strategic

interests and the function of the BRI transportation

hub, this model will be better applied locally. Second,

whether the PPC modal can be applied locally

depends on whether the economic coupling effect can

find a balance point for both sides. The benefits of

international cooperation are apparent, but conflicts in

interests are often an important reason for the failure

of cooperation.

Fortunately, with the help of the economic

coupling effect, the PPC modal mediates the conflict

of interest well. The core of the economic coupling

effect is the principle of sustainable development:

compared with short-term construction income, and

the PPC mode pays more attention to long-term

investment and sustainable development.( Please find

Figure 2) The PPC model will build ports, industrial

parks, and urban construction into an interconnected

comprehensive platform, closely combine the host

country's local customs and industrial base,

appropriately adjust the investment plan, and build

an investment plan suitable for the host country.

Rather than belittling management and pursuing

short-term profits, if the investors of the PPC modal

pay more attention to cooperation with the host

country, emphasize a high degree of consistency in

the concept of park development and operation, and

move from short-term development to cooperation to

build a comprehensive industrial development model

to promote BRI international capacity cooperation,

PPC modal will be more likely to succeed in the local

area. Third, the investors adopting PPC mode and the

host country should have the economic concept and

political philosophy of win-win cooperation, which is

the premise and guarantee of cooperation. This model

is not to export production capacity or technology to

the host country unilaterally or unilaterally but to

build a community of interests with the host country

through the concept of sharing and integration. In

summary, if the investor and the host country can

reach a consensus on the above three points, then the

PPC model is replicable overseas.

Figure 2. PPC Oversea Model

679

6 CONCLUSION

In our in-depth analysis of two prominent investment

cases—the China-Belarus Industrial Park (GSIP) and

Djibouti Port Industrial Park—this study has

scrutinized the replicability of the "Port-Park-City"

(PPC) model in overseas contexts, with a specific

focus on the regional economic coupling effect. The

insights drawn from this examination shed light on

the model's successful adaptation in host countries,

even amid diverse national conditions and strategies.

Despite variations, a common thread emerges in the

application of the PPC model.

This research has effectively bridged the

theoretical constructs and practical outcomes,

enriching the academic discourse while offering

valuable guidance to port enterprises and

policymakers navigating the intricate landscape of

overseas port investments. During the initial phases of

these projects, the PPC model's emphasis on

harmonious collaboration with host countries

emerges as pivotal. By integrating development needs

and competitive advantages, the model adopts a

comprehensive approach that provides consistent

institutional support and policy requisites for the

park. In contrast to conventional short-term profit-

centric approaches, the PPC model underscores the

significance of long-term management and sustained

cooperation with host nations. This commitment is

evident in its alignment with operational concepts

and a dedication to consistency throughout park

development. Serving as a foundational platform, the

PPC model facilitates industrial consolidation and

fosters collaborative capacity, aligning seamlessly

with the vision of international capacity cooperation

and global expansion championed by the Chinese

government through the Belt and Road Initiative.

Acknowledging inherent limitations, such as the

scarcity of comprehensive and mature data, this study

adopts a pragmatic approach by examining three

selected cases with more comprehensive and detailed

data. These cases serve as critical exemplars for

elucidating the intrinsic internationalization

mechanisms of the PPC model, viewed through the

analytical lens of the "coupling effect theory."

This research paves the way for future research

endeavors aimed at enhancing our comprehension of

port enterprises' overseas investments and the

dynamics of the PPC model. Subsequent research

should explore the refinement of the PPC model's

applicability across different cultural and geopolitical

contexts, delve into the roles played by governmental

policies, regulatory frameworks, and cultural factors

in the successful adoption of the PPC model, and

conduct a comprehensive analysis of the risks and

challenges associated with implementing the PPC

model in diverse overseas settings. Such

investigations could encompass matters related to

regulatory compliance, local partnerships,

environmental sustainability, and stakeholder

engagement. An in-depth understanding of the

intricate interplay between economic, social, and

environmental factors will be pivotal in shaping the

sustainability of the PPC model's overseas replication.

In conclusion, our findings substantiate the

viability and potential replicability of the PPC model

as a premier strategy for overseas investments by port

enterprises. Rooted in the principles of "cooperation,

co-construction, and sharing," inherent to the PPC

model, is a blueprint empowering Chinese port

enterprises to attain mutual prosperity and enduring

development along the Maritime Silk Road. These

benefits extend beyond the growth of port enterprises,

profoundly impacting the prosperity and well-being

of nations and communities along this historic route.

The successful replication of the PPC model hinges

not only on its investment and operational

dimensions but also on its alignment with the

strategic goal of sustainable long-term development.

Serving as a conduit for government-enterprise

collaboration, the PPC model seamlessly merges port

strengths, urban planning, and economic hinterland

into an efficient regional circular economy

powerhouse. In this light, the PPC model stands as an

actionable and replicable overseas investment strategy

for port enterprises, bearing significant economic and

strategic implications.

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