COSCO Shipping Holdings, China’s biggest marine transport line, has been blacklisted by the US government for alleged links with the People’s Liberation Army.
The shipping line was named in a Federal Register filing on Tuesday (Jan 7) as qualifying as a Chinese military company as determined by the Pentagon, along with Tencent Holdings and Contemporary Amperex Technology.
Cosco shares fell as much as 4.4 per cent in Hong Kong on Tuesday, more than the city’s benchmark stock index. Chinese oil major China National Offshore Oil Corporation (Cnooc) was also on the list. Its stock dropped as much as 1.6 per cent in Hong Kong.
The two companies did not immediately respond to requests for comment.
Both firms have been previously targeted by Washington. Cosco was sanctioned in 2019 for hauling Iranian oil, with those penalties lifted in 2020. Cnooc was one of the earliest Chinese state-owned enterprises to be hit with US sanctions and was also added to a Pentagon blacklist in 2021.
While being on the blacklist carries no specific penalties, it discourages US firms from dealing with those companies. Two Chinese shipbuilders – China State Shipbuilding and China Shipbuilding Trading – were also included on the list.
The Pentagon’s latest blacklist highlights increased scrutiny of marine transport and shipbuilding, with wars in the Middle East and Ukraine and Donald Trump’s imminent return to the White House putting geopolitical concerns front and centre. China has the world’s largest shipbuilding sector, producing more than half of merchant vessels globally, while the US industry has virtually collapsed over the last generation.
Cnooc, meanwhile, has two onshore shale oil and gas projects in the US, two deepwater projects and interests in several other exploration blocks in the US Gulf of Mexico, according to Bloomberg Intelligence. Rising tensions with Washington could cause the company to reassess its ownership of those assets, it said in a note late last month. BLOOMBERG
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