WASHINGTON, Sept 1 (Reuters) – COSCO, a major Chinese state-owned shipping company, is reportedly using hidden equipment on its ships to spy on military communications near the coastlines of several target countries, including the United States, according to two senior officials from the Trump administration.
These officials, who chose to remain anonymous to discuss the U.S. assessment of the Chinese program, indicated that COSCO has a long-standing partnership with Beijing for intelligence gathering. This partnership allows China to intercept communication signals from vessels and aircraft across Europe, North America, and Asia.
One official mentioned that the sophisticated equipment on the ships aims to help China collect information on “military communications technologies and encryption developments.”
This effort also helps Beijing keep an eye on crucial shipping lanes and maritime routes that are important for trade and military navigation, according to the official.
COSCO has not responded to requests for comments, and China's embassy in Washington dismissed the U.S. claims as unfounded.
U.S. President Donald Trump and Chinese President Xi Jinping are set to meet in Washington later this month to discuss various sensitive security and trade matters.
While the officials did not specify the exact type of equipment being used on COSCO ships, they referred to it as “sophisticated signals intelligence collection” tools, which are distinct from standard communication hardware.
They noted that Beijing utilizes the collected information to strengthen its stance in territorial disputes and to conduct maritime reconnaissance and early warning assessments of foreign military targets.
The Chinese embassy in Washington stated that the Chinese government never encourages companies or individuals to “collect or provide data, information, or intelligence abroad in violation of local laws.”
“We oppose defaming China by spreading the so-called ‘intelligence collection’ narrative, which has no basis in fact,” said embassy spokesperson Liu Chang.
ALLEGED LINKS BETWEEN THE CHINESE GOVERNMENT AND SHIPPING COMPANIES
A report from the U.S. Naval War College published in April 2025 suggested that the People’s Liberation Army (PLA) of China is likely using the country’s fishing and commercial shipping fleets for intelligence and surveillance purposes.
In January 2025, the Pentagon included COSCO on a list of companies connected to China’s military. This designation has significant reputational implications for companies and results in U.S. government procurement bans, though it does not involve formal sanctions.
Chinese law mandates that firms in the country assist with government intelligence operations.
Despite this, COSCO continues to be one of the leading global shipping companies that operate at U.S. ports and has numerous joint ventures for terminal services at these ports.
The Trump administration intended to impose billions of dollars in port fees on Chinese shipping companies, including COSCO, to boost the struggling U.S. shipbuilding and maritime sectors last year.
However, the plan was put on hold after Trump reached a deal with Xi in October for a temporary truce in the trade war. This agreement is set to expire in November, and discussions about a possible extension are anticipated during the upcoming talks between the leaders.
Isaac Kardon, a specialist in Chinese maritime strategy at Johns Hopkins School of Advanced International Studies, stated that addressing security concerns will be challenging due to COSCO's deep involvement in U.S. trade.
“Removing COSCO from our supply chains and transport networks could be a dangerous operation for U.S. trade networks,” Kardon remarked.