The intelligence collection program is effective because Chinese shipyards construct nearly 70 percent of the Container, or box, ship market. These vessels are the largest cargo ships to ever go to sea. The largest container ships weigh up to 250,000 tons and are 400 meters long. That’s 15 percent longer and more than twice as heavy as the largest aircraft carriers, like the U.S. Nimitz class.
Container ships can carry over 24,000 TEU (Twenty-Foot Equivalent Units), or 6.1-meter metal containers. These ships have crews of fewer than fifty officers and sailors. The Nimitz has a ship’s complement of about 5,000 personnel.
COSCO, the builder and owner of most of these containerships, operates a fleet of nearly 400 24,000 TEU container ships. The Chinese government owns COSCO, and it can use its ships for military purposes. In wartime, that means COSCO ship officers have been trained to operate their ships in support of combat operations.
COSCO is a $28 billion-a-year business that also owns ship repair facilities and port operations worldwide. Meanwhile, South Korea is returning to building these 24,000 TEU ships, with orders for 24. In response, China plans to build 32,000 TEU ships.
China has other shipping interests that are only tangentially related to moving goods around the world. Chinese companies have taken on management of more foreign ports. This port management business is an important capability for many nations that lack the cash and experience to make their port operations more efficient. China is not alone in this business. Persian Gulf states, especially the UAE, have long managed port operations for many Asian and African nations. UAE companies are reliable, well-funded, and can quickly upgrade ports where they are welcome.
Chinese efforts have become less popular because Chinese-managed ports, especially in Central and South America, are increasingly used by Chinese government-influenced firms to set up espionage operations disguised as part of the port infrastructure.
Not only are Chinese-managed ports being subverted for intelligence and corporate espionage, but most of the shipping using these ports is built in China by COSCO, a $255 billion-a-year business owned by the Chinese government, that operates dozens of tankers and container transports, as well as ship repair facilities and port operations around the world. It was always understood that COSCO would provide cover for Chinese spy operations, and any special operations the Chinese Navy needed help with.
China is often the major importer and exporter in ports it controls. That makes it easier for Chinese raw material exports to move without paying all the taxes due. The same game plays out with tariffs on imported goods. Chinese port officials can doctor the paperwork and bribe locals as needed to get their goods into a country as cheaply as possible.
Over the last few years, it was found that COSCO was more into espionage than previously thought. As American counter-terrorism activities increased in out-of-the-way places, they often found that not only was COSCO already there, but so were plenty of Chinese intelligence personnel, operating under the cover of COSCO employees. It was a near-perfect fit. Port operations are at the center of much of what goes into and comes out of a country. In many poor countries, the local officials who oversee foreign operators like COSCO can be bribed to look the other way when special cargo goes in or out. COSCO also moves sensitive people and material for the Chinese military or anyone else who can afford it.
It's never been a secret that COSCO works closely with Chinese military and intelligence agencies, but the degree of cooperation has been increasing. COSCO has also been caught smuggling illegal cargo like weapons, hazardous waste, and anything else someone can afford to have moved. In most non-United States or European ports, Chinese-run ports can do whatever they want without fear of competition from nosy, generally incorruptible American or European port inspectors.
The Chinese-controlled ports provide a worldwide network of ports China can use to disrupt port operations in wartime. Even the United States could not quickly deal with the Chinese-controlled ports. Replacing personnel with trained locals or foreigners would take weeks, if you were lucky, but more likely months. Meanwhile, Chinese port management firms could sabotage port operations as a last act before locals replaced them. The new port officials would require training, much of it on the job, as local training teams struggled to get ports functioning effectively.
James F Dunnigan