Chinese Communist Party's Influence on US Shipping Infrastructure
A congressional investigation has raised concerns about the influence of the Chinese Communist Party (CCP) in US ports. The investigation discovered surveillance equipment and connections to China's military in cranes, indicating a potential national security threat to the US shipping infrastructure.
China's Dominance in the Global Maritime Industry
The House Homeland Security Committee and the Select Committee on the CCP recently published a report that emphasizes the increasing threat to US security due to China's dominance in the global maritime industry. The report focuses on Shanghai Zhenhua Heavy Industries (ZPMC), a Chinese state-owned company that produces approximately 80% of the ship-to-shore (STS) cranes used at US ports.
Cybersecurity and National Security Risks
The investigation revealed that these cranes pose cybersecurity and national security risks due to embedded technology that could potentially allow the CCP to access or disrupt US port operations. Moreover, ZPMC has exerted pressure on some US port operators to allow remote access for maintenance and diagnostics, which raises concerns about potential espionage and sabotage.
China's Control Over Maritime Infrastructure
China's control over maritime infrastructure and data collection presents serious vulnerabilities for the United States and its allies. Lawmakers are advocating for US ports to switch to alternative crane manufacturers, but this effort is complicated by ZPMC's market dominance. The CCP's national security and intelligence laws require companies like ZPMC to support intelligence activities, which further increases the threat to US infrastructure.
Intelligence Gathering and CCP Influence
A recent report disclosed that ZPMC cranes contain cellular modems that are unnecessary for their operation and could be used for intelligence gathering. These modems were not part of the purchase agreements with US port authorities. Furthermore, ZPMC's close ties to China's security apparatus and its base's proximity to a warship-building shipyard are also concerning. ZPMC's chairman, Liu Chengyun, leads the company's internal Communist Party committee, making the company susceptible to CCP influence.
Demands for Explanations
The congressional committee sent a letter to ZPMC demanding explanations about its ties to the CCP, whether it received subsidies from Beijing, and whether the cranes contained surveillance equipment. ZPMC responded that CCP approval was needed to answer the committee’s questions and requested that the committee sign a nondisclosure agreement, which was declined.
ZPMC's Response
While ZPMC claimed there was no evidence that Chinese intelligence or security services had required them to modify equipment for US ports with surveillance devices, they cited the law on “guarding state secrets” as a reason for not disclosing the nature of their relationships with the Ministry of State Security. ZPMC has not clarified to the U.S. committees who the internal Party committee reports to in Beijing or what information is shared.
US Sanctions
ZPMC is a subsidiary of the state-owned China Communications Construction Ltd. (CCCC), which has faced significant U.S. sanctions. In August 2020, the U.S. Department of Commerce added several CCCC subsidiaries to the Bureau of Industry and Security’s Entity List due to their role in militarizing artificial islands in the South China Sea. The U.S. Department of Defense identified CCCC as one of the “Chinese military companies “ operating in the United States.
Executive Order 13959
In November 2020, then-President Donald Trump issued Executive Order 13959, prohibiting American companies and individuals from owning shares in firms like CCCC linked to the People’s Liberation Army. In December 2020, the Department of Commerce added CCCC to the Entity List, banning it from purchasing American products.
President Joe Biden's Stance
In 2021, President Joe Biden not only upheld Executive Order 13959 but expanded it, stressing the need to prevent the CCP from using U.S. investors and customers to finance China’s military-industrial complex. This included China’s involvement in military, intelligence, and security research, as well as weapons production through its Military-Civil Fusion strategy, which potentially makes all Chinese companies tools of the CCP by merging civilian and military sectors.
CCP's Economic Statecraft
The CCP uses economic statecraft to increase U.S. reliance on Chinese equipment and technology, particularly in the maritime sector. U.S. federal law enforcement agencies have confirmed that Chinese state-owned enterprises aggressively seek to establish a strategic presence at key ports, leveraging subsidies to gain influence. China’s subsidies make ZPMC cranes half the price of competitors, leaving U.S. ports with few alternatives.
Bottom Line
The increasing influence of the Chinese Communist Party in the US shipping infrastructure raises serious concerns about national security. The dominance of Chinese companies in the maritime industry, coupled with their potential to disrupt US port operations, poses a significant threat. The question remains, how should the US respond to this growing threat? Share your thoughts and this article with your friends. Don't forget to sign up for the Daily Briefing, which is everyday at 6pm.
