COSCO Shipping Holdings, China’s largest marine transport company, has been blacklisted by the U.S. government for alleged links to the People’s Liberation Army (PLA). The company was named in a Pentagon filing on January 7, alongside Tencent Holdings and Contemporary Amperex Technology, as a Chinese military company.
Shares of COSCO fell by as much as 4.4% in Hong Kong, reflecting market reaction to the news. Chinese oil giant China National Offshore Oil Corporation (Cnooc) was also added to the blacklist, seeing a 1.6% drop in stock value.
This is not the first time COSCO has faced U.S. sanctions. In 2019, the company was penalized for transporting Iranian oil, though those penalties were lifted in 2020. Cnooc has also been targeted by the U.S. previously, including being added to a Pentagon blacklist in 2021.
While being on the blacklist does not carry specific penalties, it discourages U.S. firms from engaging with these companies, impacting business opportunities. The latest sanctions reflect increased scrutiny of China's marine transport and shipbuilding industries, which are now at the center of geopolitical tensions, particularly with the U.S. and ongoing global conflicts.
China’s shipbuilding sector dominates the global market, producing more than half of the world’s merchant vessels, while the U.S. industry has dwindled over the years. The Pentagon’s move highlights the growing importance of the shipping industry amid international political shifts.
