Yes, China’s State-Owned Shipping Giant Is Spying on the United States

COSCO’s cover is blown. On September 1, Reuters reported that the Chinese state-owned shipping giant — one of the largest maritime services companies in the world — uses equipment concealed aboard its ships to spy on military communications near the coastlines of target nations, including the United States. The company has denied the claims. COSCO is one of a growing number of Chinese companies with surveillance capabilities, reflecting Beijing’s broader strategy of treating ostensibly commercial businesses as extensions of the state. This expanding maritime commercial-military footprint directly threatens U.S. national security.

With Chinese Maritime Equipment, the Potential for Spying Is Built In

Beijing has invested heavily in maritime surveillance for both commercial and military advantage. A 2024 congressional report found that ZPMC, the Chinese state-owned crane manufacturer responsible for construction of roughly 80 percent of the ship-to-shore cranes at U.S. ports, installed cellular modems on some of them capable of enabling remote access. Separately, the state-linked logistics platform LOGINK aggregates data from ports worldwide, giving Beijing visibility into sensitive shipping data. These surveillance risks are compounded by China’s National Intelligence Law, which compels all Chinese companies and citizens to share any data with the state on demand.

No Line Between Business and State in China

Beijing deliberately blurs the distinction between state and private enterprise. Both state-owned and nominally private firms serve as extensions of the government, whether by dominating strategic sectors, such as critical minerals and battery production, or by directly supporting intelligence and military objectives. This dual-use model gives Beijing a commercial advantage in peacetime that can be converted to military advantage for future conflicts.

COSCO exemplifies the model. On its face, the company is a commercial shipping operator that owns vessels and other maritime infrastructure. But its civilian ports abroad can also accommodate People’s Liberation Army Navy (PLAN) vessels — including COSCO’s Piraeus Port in Greece, which hosted a PLAN visit in 2017 — and are required by Chinese law to do so in wartime, expanding China’s worldwide naval footprint while Beijing maintains only one official overseas naval base.

U.S. Vulnerability to Chinese Maritime Dominance

Outside of the surveillance threat, China’s global dominance of the maritime sector is itself a vulnerability. China controls more than half of global shipbuilding capacity (and captured 82.5 percent of new shipbuilding orders in the first half of 2026), 70 percent of the ship-to-shore crane market, 95 percent of dry shipping container manufacturing, and 86 percent of intermodal chassis — leaving the United States with few alternatives. Beijing has also moved to lock in port control, blocking BlackRock and MSC’s bid for 43 CK Hutchison ports last year and insisting COSCO receive a majority stake. This concentration invites economic manipulation: in May 2026, four Chinese firms, including a COSCO subsidiary, were charged with fixing shipping container prices, compounding COVID-era supply-chain shocks.

Following an investigation into China’s unfair maritime practices, the U.S. Trade Representative (USTR) imposed a 100 percent tariff on Chinese-made ship-to-shore cranes in 2025, and in August 2026, the Commerce Department renewed a 188.05 percent anti-dumping duty on Chinese intermodal chassis. USTR also proposed Chinese shipping container tariffs and new port fees on Chinese-linked vessels, but the container tariff was dropped and the fees suspended under the U.S.-China trade truce.

Reviewing and Reducing Reliance on Chinese Maritime Infrastructure

The U.S. government should conduct a comprehensive review of the multilayered role Chinese firms play in global maritime infrastructure — including port ownership stakes, Chinese-made logistics technology, shipping data flows, cyber vulnerabilities, and dual-use infrastructure risk more broadly.

Because China’s maritime market dominance directly amplifies the surveillance risk posed by firms like COSCO, reducing the surveillance risk requires countering the market dominance itself. Current anti-dumping tariffs on chassis and cranes are a good start, but USTR should extend them to shipping containers and other products monopolized by China.

However, tariffs alone are not enough; the United States and allies must also build viable alternatives. The Make American Shipbuilding Great Again partnership with South Korea is a promising model for similar co-investment across the maritime sector. India is a strong candidate for shipping container manufacturing, while investing in European technical expertise could expand non-Chinese ship-to-shore crane availability.

Elaine Dezenski is senior director and head of the Center on Economic and Financial Power (CEFP) at the Foundation for Defense of Democracies (FDD). Susan Soh is a research associate at FDD. For more analysis from Elaine, Susan, and FDD, please subscribe HERE. Follow FDD on X @FDD and @FDD_CEFP. Follow Elaine on X @ElaineDezenski. Follow Susan on X @SusanSoh827. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.