In a move that has put Beijing on notice, the US has blacklisted China’s largest shipping company, Cosco Shipping Holdings Co., along with two major shipbuilders, citing their alleged ties to the People’s Liberation Army (PLA), Bloomberg reports.
At the center of the controversy is Cosco Shipping Holdings Co., a maritime giant, now listed on the US Federal Register blacklist.
The blacklisting extends beyond just shipping companies, reaching into China’s tech and energy sectors, with heavyweights like Tencent Holdings, Contemporary Amperex Technology, and the state-run oil behemoth Cnooc Ltd finding themselves in Washington’s crosshairs.
Notably, Cosco and Cnooc are no strangers to U.S. sanctions. In 2019, Cosco faced penalties for transporting Iranian oil, though these were lifted in 2020. Meanwhile, Cnooc, among the first Chinese state-owned enterprises sanctioned by Washington, found itself on a Pentagon blacklist in 2021.
A 2020 report by the Center for Strategic and International Studies flagged COSCO as the “maritime supply arm of the PLA,” highlighting its logistical support to the PLA Navy’s operations in the Gulf of Aden since 2008.
Although the blacklist imposes no immediate or direct penalties, it serves as a deterrent for US businesses, discouraging partnerships with these Chinese companies and escalating the ongoing geopolitical rivalry.
Interestingly, according to Bloomberg Intelligence, Cnooc still maintains a presence in US energy projects, with shale and deepwater ventures, as well as exploration blocks in the Gulf of Mexico.
This move signals a broader focus on maritime transport and shipbuilding amid growing concerns over China’s maritime militia, often referred to as a “shadow force.” The strategic use of civilian fleets with military backing has heightened tensions, placing China firmly under U.S. scrutiny as it bolsters its covert naval capabilities.
With these developments coinciding with Donald Trump’s return to the White House, US-China maritime competition appears to be intensifying.
The Trojan Ship Scenario
These recent actions signal heightened vigilance against China’s civil-military fusion strategy.
In August 2024, the massive COSCO Sakura, a 366-meter-long container ship, made headlines as it docked in Norfolk, Virginia, passing alarmingly close to the Norfolk Naval Station, the world’s largest naval base, home to critical US assets like nuclear submarines and aircraft carriers.
This vessel, capable of carrying over 14,000 shipping containers, is owned by COSCO Shipping, a Chinese state-run entity. Built in 2018 by Jiangnan Shipyard, the same facility responsible for constructing PLA Navy warships and China’s latest aircraft carrier, Fujian, Sakura embodies China’s civil-military fusion policy.
Thomas Shugart, an Adjunct Senior Fellow at the Center for a New American Security (CNAS) and former US Navy submarine officer, highlighted the risks and strategic vulnerability in a series of posts. His analysis of the ship’s potential as a Trojan horse was even more chilling.
“If only, say, 10% of those containers were used for munitions, they could, for example, field 144 cruise missiles and 252 quadcopters, more than enough to devastate every warship at Norfolk, and able to reach land targets across the mid-Atlantic and well past DC,” Shugart noted.
This scenario underscores the growing concerns about China’s civil-military fusion policy, which systematically integrates civilian industries with military operations.
COSCO Shipping Lines Ltd, part of the state-owned COSCO Group, is a prime example of this strategy. As one of the world’s largest shipping companies, it works closely with the PLA, routinely supporting naval operations and logistics.
China’s Maritime Shadow Force
A December 2024 report from ‘the China Maritime Studies Institute’ at the US Naval War College titled “Shadow Force: A Look Inside the PLA Navy Reserve” sheds light on this growing concern.
According to the report, the People’s Liberation Army (PLA) maritime ‘Reserve Force’ consists of two key components: the PLA Navy Reserve and the Maritime Militia.
Together, they serve as strategic assets, enhancing China’s naval reach and operational flexibility. This reserve force allows China to extend its maritime influence and sustain long-term naval operations, effectively strengthening its power projection on the global stage.
A) PLA Navy Reserve
PLAN Reserve remains a largely obscure aspect of China’s maritime strategy but is considered a crucial element in strengthening the PRC’s naval operations. While not as publicly visible as the regular PLA Navy (PLAN), this reserve force is designed to augment and support PLAN personnel, advancing the country’s strategic maritime goals.
The PLAN Reserve is largely composed of military veterans, giving it a depth of operational competence. This veteran-heavy composition ensures that the reserve can quickly mobilize skilled personnel for missions when necessary.
PLAN reservists are distinguished by their unique role and appearance—they wear the PLAN uniform while on duty, symbolizing their integration into China’s naval strategy.
Though integral to China’s naval operations, the reserve has not yet been observed directly engaging in real-world military operations. Instead, its role is mainly supplementary, acting as a force multiplier for active duty personnel and a flexible strategic asset for a variety of missions.
B) Maritime Militia
In 2021, the PLA’s amphibious unit conducted a series of cross-sea landing drills using a 10,000-ton civilian ferry. This marked a significant shift from the smaller civilian vessels previously employed, according to China Central Television (CCTV).
Observers noted that this shift enhances China’s capacity to transport large numbers of troops for amphibious landing operations, signaling a new approach to military logistics.
The People’s Armed Forces Maritime Militia (PAFMM) is a crucial element of China’s ‘gray zone’ strategy, which operates in the space between peace and war through calculated coercion.
The militia’s ambiguous status, with its lack of formal armaments, gives China the flexibility to either deny or claim responsibility for its actions, depending on the political or military context. This dual-use strategy allows China to assert its maritime claims while maintaining plausible deniability.
For years, the PLA has signaled its intention to use civilian shipping in a potential cross-strait invasion of Taiwan. This tactic is part of a broader strategy that has raised concerns in the United States, which believes that China’s maritime militia violates international law, particularly regarding its enforcement of unlawful maritime claims. However, the militia’s scope could extend far beyond Taiwan and the South China Sea.
China’s maritime militia has garnered significant attention over the past decade, especially for its role in supporting China’s territorial claims in the South China Sea and East China Sea.
Research has shown that civilian vessels are increasingly being utilized for military power projection beyond East Asia, with the militia’s massive fleet of fishing boats serving as China’s eyes and ears across a vast maritime theatre.
Dominating The Seas Through Industry
China’s maritime influence extends far beyond military capability. The country has established an iron grip on global shipping infrastructure, controlling seven of the world’s ten busiest ports and producing over 95% of global shipping containers.
In 2024, China’s shipbuilding sector reached new heights, completing 42.3 million deadweight tons of merchant shipping – more than half the world’s total output.
This industrial dominance, coupled with recent moves to restrict drone component exports to the US and Europe, showcases China’s growing leverage over global supply chains. With 90% of world trade traveling by sea, China’s maritime strategy has positioned the country at the heart of global commerce.
The combination of industrial might, military capability, and strategic ambiguity has created a maritime powerhouse. As tensions escalate and with the impending return of President-elect Donald Trump to the White House, the maritime competition between the US and China is set to intensify further.
- Shubhangi Palve is a defense and aerospace journalist. Before joining the EurAsian Times, she worked for ET Prime. In this capacity, she focused on covering defense strategies and the defense sector from a financial perspective. She offers over 15 years of extensive experience in the media industry, spanning print, electronic, and online domains.
- Contact the author at shubhapalve (at) gmail.com
