China's biggest shipping line Cosco added to US military blacklist

Federal Register filing named it as qualifying as a Chinese military company as determined by the Pentagon, along with Tencent Holdings Ltd. and Contemporary Amperex Technology Co Ltd

By Weilun Soon and Yongchang Chin

 

Cosco Shipping Holdings Co, 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 as qualifying as a Chinese military company as determined by the Pentagon, along with Tencent Holdings Ltd. and Contemporary Amperex Technology Co Ltd.

 

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 Cnooc Ltd. was also on the list. Its stock dropped as much as 1.6 per cent in Hong Kong.

 

 

The two companies didn’t 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 Corp. and China Shipbuilding Trading Co — 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 center. 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.