On March 14, 2016, in the squid grounds off the coast of Patagonia, a rusty Chinese vessel called the Lu Yan Yuan Yu 10 was fishing illegally several miles inside Argentine waters. Spotted by an Argentine coast-guard patrol and ordered over the radio to halt, the specially designed squid-fishing ship known as a jigger fled the scene. The Argentinians gave chase and fired warning shots. The Lu Yan Yuan Yu 10 then tried to ram the coast-guard cutter, prompting it to open fire directly on the jigger, which soon sank. The crew were pulled out of the water by another vessel.
Although the violent encounter at sea that day was unusual, the incursion into Argentine waters by a Chinese squid jigger was not. Owned by a state-run behemoth called the China National Fisheries Company, or CNFC, the Lu Yan Yuan Yu 10 was part of a fleet of several hundred Chinese jiggers that makes annual visits to the high-seas portion of the fishing grounds that lie beyond Argentina’s territorial waters.
During their visits, many of these jiggers turn off their locational transponders and cross secretly into Argentine waters, where they are not permitted to go. Since 2010, the Argentine navy has chased at least 11 Chinese squid vessels out of Argentine waters for suspected illegal fishing, according to the government.
A year after the illegal incursion and sinking of the Lu Yan Yuan Yu 10, Argentina’s Federal Fishing Council issued a little-noticed announcement: It was granting fishing licenses to two foreign vessels that would allow them to operate within Argentine waters. Both would sail under the Argentine flag through a local front company, but their true “beneficial” owner was CNFC.
This decision was noteworthy because it seemed to violate Argentine regulations that not only forbid foreign-owned ships from flying Argentina’s flag or fishing in its waters but also prohibit the granting of fishing licenses to ship operators with records of illegal fishing in Argentine waters. “The decision was a total contradiction,” said Eduardo Pucci, a former Argentine fisheries minister who now works as a fishing consultant.
The move by Argentine authorities may have been a contradiction, but it is an increasingly common one in that country and elsewhere around the world. In recent years, from South America to Africa to the far Pacific, China has been buying its way into restricted national fishing grounds, primarily via a process known as “flagging in.” This method typically involves the use of business partnerships to register foreign ships under the flag of another country, thereby allowing those vessels to fish in that country’s territorial waters.
Chinese companies now control at least 62 industrial squid-fishing vessels that fly the Argentine flag, which constitutes most of the country’s squid fleet. Many of these companies have been tied to a variety of crimes, including dumping fish at sea, turning off their transponders, and engaging in tax evasion and fraud.
Trade records show that much of what is caught by these vessels is sent back to China, but some of the seafood is also exported to countries including the United States, Canada, Italy and Spain.
China now operates almost 250 of these flagged-in vessels, including those off the coasts of Micronesia, Kenya, Ghana, Senegal, Morocco, and even Iran.
These hundreds of flagged-in industrial fishing ships complicate China’s ocean conservation goals. In 2017, after pressure from environmental groups about overfishing, Beijing announced that it would cap the size of its distant-water fleet at 3,000 vessels. But that tally does not take into account the growing number of industry ships that China owns and flags into other countries.
The Prefecto Derbes, an Argentine Coast Guard vessel, at Puerto Madryn harbour in December, 2016. Painted on the side of the vessel are the names of ships it has arrested, among them the Chinese fishing vessel Lu Yan Yuan Yu 10.Milko Schvartzmann/Supplied
As global demand for seafood has doubled since the 1960s, the appetite for fish has outpaced what can be sustainably caught. Now, more than a third of the world’s stocks have been overfished. To feed the demand, the proliferation of foreign industrial fishing ships, especially from China, risks collapsing domestic fish stocks of countries in the global South while also jeopardizing local livelihoods and compromising food security by exporting an essential source of protein. Western consumers, particularly in Europe, the U.S. and Canada, are beneficiaries of this cheap and seemingly abundant seafood caught or processed by China.
“It’s a net transfer from poorer states who don’t have the capacity to protect their fisheries, to richer states who just want cheaper food products,” said Isaac B. Kardon, senior fellow for China studies at the Carnegie Endowment for International Peace.
China is second only to the U.S. as a fish supplier to Canada, accounting for more than 11 per cent of all seafood imports in 2021, according to Canadian government figures.
Canada has launched several legislative initiatives in recent years to tackle some of the issues plaguing the seafood industry, including ratification of the Agreement on Port State Measures, pledging to deny port entry and the use of port services to vessels involved in illegal fishing. But it would be very difficult for the Canadian government to block imported seafood from ships that are flagged in to other countries since that process is not illegal.
Despite global concerns about the practice of flagging in, China has not hidden how this approach factors into larger ambitions. In an academic paper published in 2023, Chinese fishery officials explained how they have relied extensively on Chinese companies, for example, to penetrate Argentina’s territorial waters through “leasing and transfer methods,” and how this is part of a global policy.
The Argentine Coast Guard fire shots at the Jing Yuan 626, a Chinese vessel, after it was spotted fishing illegally in Argentine national waters, in February, 2018.Javier Giannattasio/Supplied
The scourge of illegal fishing and overfishing did not originate with China, of course. Western industrial fleets dominated the world’s oceans for much of the 20th century, fishing unsustainably in ways that have helped cause the current crisis, explained Daniel Pauly, a marine biologist at the University of British Columbia.
China’s expansionist methods are also not historically unique. Countries in the West have a long and infamous record of intervening abroad when leaders from other countries begin erecting highly protectionist laws. In the past several decades, the tactic of flagging in has been used by American and Icelandic fishing companies. More recently, as China has increased its control over global fishing, the U.S. and European nations have jumped at the opportunity to focus international attention on China’s misdeeds.
China has a well-documented reputation for violating international fishing laws and standards, bullying other ships, intruding on the maritime territory of other countries and abusing its fishing workers. In 2021, the Global Initiative Against Transnational Organized Crime, a non-profit research group, ranked China as the world’s biggest purveyor of illegal fishing. But even frequent culprits can also be easy scapegoats: A country that regularly flouts norms and breaks the law can also, at times, be a victim of misinformation. When criticized in the media, China typically pushes back, not without reason, by dismissing the criticism as politically motivated and by accusing its detractors of hypocrisy.
The trend of Chinese ships flagging in is especially pronounced in Africa, where Chinese companies use the approach to operate in the national waters of at least nine countries on the continent – among them, notably Ghana. More than 135 Chinese fishing ships flying the Ghanaian flag are fishing in national waters, even though foreign investment in fishing is technically illegal. Nonetheless, up to 95 per cent of Ghana’s industrial trawling fleet has some element of Chinese control, according to a 2018 report by the Environmental Justice Foundation, an advocacy group.
One of the concerns researchers have raised about this fleet has been its targeting of juvenile fish, which is problematic because catching young fish before they have a chance to reproduce threatens the stability of the area’s fish stocks. Catching juvenile fish is a crime in Ghana that carries a fine of US$100,000 or more, but these fines are rarely levied, according to a 2023 report from the Stimson Center, a non-profit research group.
China has also displaced fishing vessels from the European Union, right on its doorstep, in the waters of Morocco. In the recent past, dozens of vessels, most of them from Spain, fished with the permission of the Moroccan government inside the African country’s exclusive economic zone. The agreement lapsed, however, in 2023, and China now operates at least six flagged-in vessels in Moroccan waters.
Chinese ships also comb the waters of Fiji, the Solomon Islands and the Federated States of Micronesia, having flagged in or signed access agreements with those countries, according to a report released in 2022 by the Congressional Research Service in the U.S. “Chinese fleets are active in waters far from China’s shores,” the report said, “and the growth in their harvests threatens to worsen the already dire depletion in global fisheries.”
China’s growing reach into local waters
China operates almost 250 flagged-in vessels, including ones
that fish off the coasts of Argentina, Micronesia, Kenya,
Ghana, Senegal, Morocco and Iran.
Countries in which China has flagged-in vessels
Number of Chinese vessels registered to each country’s flag
Russia
Morocco
China
Iran
Federated States
of Micronesia
Oman
Mauritania
Senegal
Ghana
The Gambia
Kiribati
Kenya
Rep.of
Congo
Mozam.
Madagascar
Argentina
the globe and mail, source: outlaw ocean
China’s growing reach into local waters
China operates almost 250 flagged-in vessels, including ones
that fish off the coasts of Argentina, Micronesia, Kenya,
Ghana, Senegal, Morocco and Iran.
Countries in which China has flagged-in vessels
Number of Chinese vessels registered to each country’s flag
Russia
Morocco
China
Iran
Federated States
of Micronesia
Oman
Mauritania
Senegal
Ghana
The Gambia
Kiribati
Kenya
Rep.of
Congo
Mozam.
Madagascar
Argentina
the globe and mail, source: outlaw ocean
China’s growing reach into local waters
China operates almost 250 flagged-in vessels, including ones that fish off the coasts of
Argentina, Micronesia, Kenya, Ghana, Senegal, Morocco and Iran.
Countries in which China has flagged-in vessels
Number of Chinese vessels registered to each country’s flag
Russia
Morocco
China
Iran
Federated States
of Micronesia
Oman
Mauritania
Senegal
Ghana
The Gambia
Kiribati
Kenya
Rep.of
Congo
Mozam.
Madagascar
Argentina
the globe and mail, source: outlaw ocean
The maritime domain is an important front in China’s growth plans, which includes exerting power not just over the high seas and contested waters such as those in the South China Sea but also consolidating control over shipping, fishing in foreign coastal waters, and ports abroad.
To help create jobs, make money and feed its growing middle class, the Chinese government heavily supports its fishing industry with billions of dollars in subsidies including for fuel discounts, ship building or engine purchases. The Chinese fishing companies flagging into poorer countries’s waters are also eligible for these subsidies.
“The reason why the Chinese subsidize these fleets could be not only for the fish,” said Fernando Rivera, chairman of the Argentine Fishing Industry Chamber. “It has a very important geopolitical aspect.”
As the U.S., Canadian and European fishing fleets and navies have shrunk, so too has Western development funding and market investment in Latin America, Africa and the Pacific. This has created a void that China is filling as part of its Belt and Road Initiative, Beijing’s global development program.
Between 2000 and 2020, China’s trade with Latin America and the Caribbean grew from US$12-billion to US$315-billion, according to the World Economic Forum. China Development Bank and the Export-Import Bank of China, two major state-owned Chinese banks, provided US$137-billion in loans to Latin American governments between 2005 and 2020. In exchange, China has, at times, received exclusive access to a wide range of resources, from oil fields to lithium mines.
Several fishing vessels owned by an Argentine company with significant Chinese investment docked in Buenos Aires. Two of the vessels have records of disembarking dead crew members in a Uruguayan port. One of the vessels has a record of disabling its automatic identification system, an indicator of potential illegal fishing.Pedro Soto/Supplied
In Argentina, China has provided billions of dollars in currency swaps, a crucial lifeline amid skyrocketing domestic inflation and growing hesitancy from other international investment or lending organizations. China has also made or promised billion-dollar investments in Argentina’s railway system, hydroelectric dams, lithium mines, and solar and wind power plants.
For Beijing, this money has created a variety of business opportunities. But it has also bought the type of political influence that became crucially important for the crew of the Lu Yan Yuan Yu 10, all 29 of whom were rescued from the water when Argentine authorities sank the ship in 2016. Most of the men were scooped up by another nearby Chinese fishing ship, Zhong Yuan Yu 11, which was also owned by CNFC and had its own history of illegal fishing in Argentine waters. These men were immediately taken back to China.
Four of the crew, however, including the captain, were rescued by the Argentine Coast Guard. They were brought to shore and charged with a range of crimes, including violating fishing laws, resisting arrest and endangering a coast guard vessel, and put under house arrest.
In 2021, Roberto Wyn Hughes, the go-to lawyer for Chinese-owned companies in Argentina, sent a letter on behalf of a consortium of Chinese companies expressing interest in developing a shipyard at the Argentine port of Comodoro Rivadavia.Pete McKenzie/Supplied
Roberto Wyn Hughes, a lawyer who frequently defends Chinese fishing companies, said that at the time, Argentine authorities typically did not prosecute the companies involved. Instead, they normally allowed the Chinese companies to pay a fine, after which their crew would be released. The sinking of the Lu Yan Yuan Yu 10 was different, however, because it sparked a media storm in Argentina and could not be handled as discreetly. Local news outlets described the ramming by the Chinese vessel and showed footage of the sinking.
Hugo Sastre, the judge handling the case, initially justified the charges filed. The Chinese officers had placed “both the life and property of the Chinese vessel itself and the personnel and ship of the Argentine Prefecture at risk,” he said. But China’s foreign ministry soon pushed back. A spokesman told reporters that he had “serious concerns” about the sinking and that his government had been engaged on behalf of the crew.
Three days later, the posture of the Argentine government began to shift. Susana Malcorra, Argentina’s foreign minister, told reporters that the charges had “provoked a reaction of great concern from the Chinese government.” She explained that she had reassured China that Argentina would follow local and international laws. “We hope it will not impact bilateral relations,” she told reporters.
After meeting with Argentina’s foreign minister in 2016, China's Foreign Minister Wang Yi promised another surge of Chinese investment to Argentina.Chalinee Thirasupa/Reuters
Several weeks later, the Argentine judiciary also fell in line. “Given the doubt that weighs on the facts and criminal responsibility” of the captain, he and the three other sailors would be released without penalty, the court announced. On April 7, the four Chinese crew members were flown back to China.
By May, Argentina’s foreign minister was on a plane to Beijing to meet with the Chinese foreign minister, Wang Yi. After their meeting, China’s foreign minister hailed their countries’ “voyage of overall co-operation” and promised another surge of Chinese investment to Argentina. Mr. Yi added: “China will continue its support to the efforts made by Argentina in safeguarding its national sovereignty and territorial integrity.”
Chinese political influence shows up on board the fishing vessels as well. The case of Manuel Quiquinte is illustrative. In the spring of 2021, Mr. Quiquinte, an Argentinian crew member on a squid jigger called the Xin Shi Ji 89, contracted COVID-19 while at sea. The ship, which was Chinese-owned, was flagged to Argentina and jigging in Argentinian waters. Its crew was a mix of Argentinian and Chinese workers.
Several days after Mr. Quiquinte fell ill, the Argentine captain called the Chinese owners to ask if the ship could go to shore in Argentina to get him medical care. Company officials said no and to keep fishing. Mr. Quiquinte died on the ship shortly thereafter, in May. The following month, a federal judge in Argentina charged the captain of the Xin Shi Ji 89 with criminal neglect.
In court papers tied to Mr. Quiquinte’s death, several of the ship’s Argentinian crew members explained that despite Argentine law forbidding non-Argentinians from being the captains or senior officers on these fishing ships, the reality is that the Chinese crew on board make the decisions. Even when they are designated on paper as lowly deckhands, Chinese crew members decide whether or not the ship will enter port to drop off a sick worker. The Argentinians might be designated as the engineers on board, but they are not supposed to touch the machines when the vessel leaves port. “The only thing we do is to assume responsibility for any accident,” Fernando Daniel Marquez, the engineer on the Xin Shi Ji 89, said in the court documents.
When contacted by reporters about the death, the vessel’s parent company, Zhejiang Ocean Family, said that the crew member had tested negative for COVID-19 prior to working on board but had indeed contracted the illness on the vessel and died after his condition deteriorated rapidly. Zhejiang Ocean Family said the vessel belonged to a local Argentine company, which Ocean Family has invested in, and it was this local company that handled the situation.
On land and at sea, Chinese shipowners use a variety of approaches to gain access to foreign waters and circumvent rules meant to protect local interests. In some countries, they sell or lease their ships to locals but retain control over decisions and profits. In other places where governments forbid foreigners from fishing their waters, Chinese companies pay fees through “access agreements.” Elsewhere, China has gone around the prohibitions on foreign shipowners by partnering with local residents and giving them a majority ownership stake.
Jorge Frias, the longtime president of the Argentine Fishing Captains’ Union, said that Argentine captains on Chinese-owned fishing vessels typically have little say over fishing decisions. Instead, those decisions are made by ‘fishing masters’ selected by the owners.Pete McKenzie/Supplied
Typically, about a quarter of the workers on Chinese-owned fishing ships operating in Argentinian waters are Chinese nationals, according to a review of about a dozen crew manifests published by local media. Jorge Frias, the president of the Argentine fishing captains’ union, explained that on Argentine-flagged ships, the Chinese nationals call the shots. The captains are Argentinians, but “fishing masters,” who are Chinese, decide where to go and when.
As these practices continue around the world, China’s sheer size, ubiquity and poor track record on labour and marine conservation is raising concerns – and those affected are attempting to bring a wider awareness to the issue.
In Ghana, for instance, industrial trawlers, most of which are owned by China, catch more than 100,000 metric tons of fish each year, according to a 2017 study by the Environmental Justice Foundation – and the country’s fishing stocks are now in crisis, as local fishermen’s incomes have dropped by up to 40 per cent over the past two decades.
In 2020, Pablo Isasa, captain of an Argentine fishing vessel, notified the Argentine Coast Guard that dozens of foreign vessels had crossed into the country’s territorial waters to fish illegally. He later confronted the vessels, chasing several back into international waters.Pete McKenzie/Supplied
“Fishing vessel owners and operators exploit African flags to escape effective oversight and to fish unsustainably and illegally both in sovereign African waters and areas beyond national jurisdiction,” wrote TMT, the non-profit that tracks maritime crime, adding that the companies were creating “a situation where they can harness the resources of a State without any meaningful restrictions or management oversight.”
In the Pacific, an inspection in 2024 by local police and the U.S. found that six Chinese flagged-in ships fishing in the waters of Vanuatu had violated regulations requiring them to record the amount of fish they catch.
And in South America, the increasingly foreign presence in territorial waters is stoking nationalist worry in places including Peru and Argentina. “China is becoming the only player, by displacing local companies or purchasing them,” said Alfonso Miranda Eyzaguirre, a former Peruvian minister of production.
Pablo Isasa, a captain of an Argentinian hake trawler, said: “We have the enemy inside and out.”
WATCH:
China has been buying its way into restricted national fishing grounds, primarily using a process known as 'flagging in.' Subtler than simply entering foreign coastal areas to fish illegally, flagging in is less likely to result in political clashes, bad press, or sunken vessels. However, the impact of this practice on nearshore fish stocks and the economies of poorer countries has the potential to wreak havoc.
Outlaw Ocean Project
This story was produced by The Outlaw Ocean Project with reporting contributed by Maya Martin, Jake Conley, Joe Galvin, Sue Ryan, Austin Brush and Teresa Tomassoni. Bellingcat, an independent investigative group, contributed reporting.