The US has blacklisted China’s largest shipping company and two shipbuilding groups for alleged links to the Chinese People’s Liberation Army.
The US has classified the world’s largest shipowner, Cosco Shipping Holdings, together with the shipbuilding companies China State Shipbuilding Corp (CSSC) and China Shipbuilding Trading Co. as military companies and placed them on a corresponding blacklist.
This does not initially entail any specific sanctions. However, US companies are required to stop doing business with these companies.
This step is seen as an indication that, alongside many other sectors, shipping and shipbuilding could also come under scrutiny as part of US President-elect Donald Trump’s protectionist objectives.
China has the largest shipbuilding sector in the world and produces more than half of all merchant ships worldwide, while the US industry has practically collapsed in the last generation and is only kept alive by US government orders.
Cosco has a fleet of 1,086 ships
According to shipbroker BRS, Chinese shipyards accounted for almost 60% of the global order book in the first quarter of last year. US nervousness about this dominance comes as shipping lines and ports become increasingly important as theatres of geopolitical competition, with Covid19 and its aftermath exposing the fragility of global supply chains.
Cosco has been targeted by Washington before. The state-owned shipping company was hit with sanctions in 2019 for transporting Iranian oil, which were lifted in 2020. The British shipbroker Clarksons lists Cosco with a fleet of 1,086 ships, far ahead of MSC in second place with 770 ships.
North American imports make up around 20% of the global container volume, with China accounting for 35% to 45% of the total.
The oil company China National Offshore Oil Corp (CNOOC) is also on the list, as is the shipping company Sinotrans & CSC Holdings, which has an extensive fleet of tankers and bulkers.
