U.S Blacklists China’s Largest Shipping Line Over Alleged Links With PLA

China’s largest marine transportation line, Cosco Shipping Holdings Co, has been blacklisted by the United States for its alleged connection with China’s People’s Liberation Army.

It has been determined as a Chinese Military Company by the Pentagon, along with Contemporary Amperex Technology Co Ltd and Tencent Holdings Ltd.

Shares of Cosco fell around 4.4% in Hong Kong on Tuesday and Cnooc Ltd, a Chinese oil major also saw a drop in its stock of 1.6% in Hong Kong.

Both companies were earlier targeted by the U.S. Cosco was sanctioned in 2019 for shipping Iranian Oil and its penalties were lifted in 2020.

Cnooc was one of the earliest Chinese-owned companies to be hit with U.S. sanctions. It was also added to the 2021 Pentagon blacklist.

Though being on the blacklist does not have any specific penalties, it discourages US companies from engaging in business with these companies. Two shipbuilders, China State Shipbuilding Corp. and China Shipbuilding Trading Co., were also added to the list.

The latest blacklist of the Pentagon shows its heightened scrutiny of maritime transportation and shipbuilding, with conflicts and wars in Ukraine and the Middle East and Trump’s return to the White House putting geopolitical tensions at the forefront.

China now boasts the biggest shipbuilding sector in the world, producing over half of merchant ships, while the U.S industry has almost collapsed and left behind in the past few years.

Cnooc has 2 onshore shale oil and gas projects in the U.S, 2 deepwater projects and interests in many other exploration blocks in the U.S. Gulf of Mexico, per Bloomberg Intelligence. Increasing tensions with Washington could cause the company to reassess its ownership of those assets, it said in a note last month.

References: CNBC TV18, Business Standard

Source: Maritime Shipping News