CCP Targets US Shipping Infrastructure

Authored by Antonio Graceffo via The Epoch Times (emphasis ours),

A congressional investigation uncovered concerns about Chinese Communist Party (CCP) influence in cranes at U.S. ports, pointing to the discovery of surveillance equipment and ties to China’s military, which poses a national security threat to U.S. shipping infrastructure.

Shipping cranes made by Chinese-owned manufacturer Zhenhua Heavy Industries Company (ZPMC) stand at the Port of Oakland, in Calif., on March 8, 2024. Justin Sullivan/Getty Images

The House Homeland Security Committee and the Select Committee on the CCP recently released a report highlighting the growing threat to U.S. security from China’s dominance in the global maritime industry.

The report focuses on Shanghai Zhenhua Heavy Industries (ZPMC), a Chinese state-owned company that manufactures about 80 percent of the ship-to-shore (STS) cranes used at U.S. ports. The investigation found that these cranes pose cybersecurity and national security risks due to embedded technology that could allow the CCP to access or disrupt U.S. port operations. Additionally, ZPMC has pressured some U.S. port operators to grant remote access for maintenance and diagnostics, raising concerns about potential espionage and sabotage.

China’s control over maritime infrastructure and data collection poses serious vulnerabilities for the United States and its allies. Lawmakers are pushing for U.S. ports to switch to alternative crane manufacturers, but ZPMC’s market dominance complicates this effort. The CCP’s national security and intelligence laws require companies like ZPMC to support intelligence activities, further heightening the threat to U.S. infrastructure.

A recent report revealed that ZPMC cranes contain cellular modems that are unnecessary for their operation, which could be used for intelligence gathering, and were not part of the purchase agreements with U.S. port authorities. ZPMC’s close ties to China’s security apparatus are also a concern, with its base located near a warship-building shipyard. Moreover, ZPMC’s chairman, Liu Chengyun, leads the company’s internal Communist Party committee, making the company vulnerable to CCP influence.

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, under China’s data security law, CCP approval was needed to answer the committee’s questions. The company also requested that the committee sign a nondisclosure agreement, which was refused. While ZPMC claimed there was no evidence that Chinese intelligence or security services had required them to modify equipment for U.S. 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.

The company’s ties to the CCP are undeniable. You Ruikai, ZPMC’s chairman and president, also serves as the party secretary for the internal Party committee, whose members are elected by the Party members of ZPMC.

To date, ZPMC has not clarified to the U.S. committees who the internal Party committee reports to in Beijing or what information is shared. ZPMC issued a statement on its website expressing offense at the allegations made by U.S. authorities and insisting that its cranes pose no cybersecurity threat.

Meanwhile, Xinhua, the CCP’s media outlet, has accused the United States of fabricating a China threat, despite Chinese laws that compel companies to gather intelligence and prohibit them from revealing their links to Beijing.

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. That same month, the U.S. Department of Defense identified CCCC as one of the “Chinese military companies“ operating in the United States.

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.

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. Biden also warned that the CCP’s use of surveillance technology posed a serious threat to U.S. national security, foreign policy, and the economy.

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. The Association of American Port Authorities has recommended rebuilding domestic crane manufacturing to reduce dependency on Chinese products.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.