Think about all those container lorries you see on the highways, wherever you live. It's a pretty safe bet that a significant proportion of them are blue with COSCO in white writing. COSCO is the engine room of Chinese exports and imports and of multi-national deliveries worldwide.

Everyone with even the slightest knowledge of China and/or transport knows that COSCO is owned by the Chinese State and that, by definition, means the Chinese Communist Party. That name gets lots of people outside China in a lather but in practice it's irrelevant: nationalised companies are commonplace all over the world. Strange names for political parties ditto: just look at the name "Labor" in Australia and "Labour" in the UK: both are utterly divorced from the working man (and woman). True, China is a one party state but that's the only legitimate questionmark in this context and the stabilityh that provides is not unattractive compared to the chaos of the two party states in the UK, AUS and the USA.

Given that ownership has never been secret, if action was an imperative, why has it not happened sooner?

In August 2018, it was reported (1) that COSCO had tripled its share of the global container market in the preceding three years, rising to more than 12%. By then third behind Maersk and Mediterranean Shipping Group, its business had grown to include more than trade into and out of China, growing its "Twenty-foot equivalent unit" capacity by 68%. During and immediately after the Pandemic, there was a slight shift towards smaller carriers but it was no significant, according to figures published by Sea-Intelligence.

Also sanctioned is China International Shipping Containers Group which produces many containers, including "Reefers" (refrigerated and freezing boxes) at low prices compared to many overseas producers.

The timing is not quite as suspicious as it seems - the sanctions are under the US Military list which is updated annually. Nor is the inclusion of COSCO Shipping - also included are two of its subsidiaries: Cosco Shipping (North America) and Cosco Shipping Finance Co.

Dozens of other companies have been added but none will have the effect outside the USA that limitations on COSCO may have.

According to Lloyds List "Cosco Shipping is the world’s largest shipping company by fleet size, operating over 1,400 vessels globally."

COSCO does more than operate ships: it operates, in some cases owns or finances, ports around the world. It is these that some have said is a risk.

A UK "think tank" produced a report, "China’s PLAN: Maritime dominion beyond the South China Sea", in May 2024 which strongly criticised China's global network of shipping services, opining that such could be used as bases for the Chinese Navy under the control of The People's Liberation Army.

Such links between the PLA, the CCP and commercial entities are often made but the criticism rarely stands up to scrutiny if compared to, for example, the USA's global network of bases in many countries - and here we are not even talking about NATO: it's the USA and the USA alone.

Politics aside, what are the effects of the sanctions?

First, that all the companies listed will not have access to US military contracts or services.
Secondly, that the companies listed are named as a military threat, so influencing others in their dealings with them.

COSCO immediately denied that any of the companies were military companies (2)

Maritime trade paper, Tradewinds, says (3) that one in five of COSCO's ships have called at a US port within the past year.

So, while formal sanctions have not been applied, the action does not fall under OFAC in any of its various forms. There is no ban on trading with any of the listed companies and no requirement to block or even report financial transactions in USD involving any of the companies.

This means that the designation has no direct commercial effect on the companies, a fact quickly recognised by markets which saw a short dip in share prices which almost immediately recovered.

It does not mean, however, that there will be no reputational damage because the lack of effect of such a designation will not be widely understood. Companies will be discouraged from using COSCO even though there are no consequences if they do.

It is unlikely, however, that a) a significant amount of trade will shift from the listed companies
b) such trade as does shift will be easily taken up by space capacity in all the relevant markets
c) the listed companies might decide that they can avoid loss of business by reducing charges and, given its vertical markets in ports, ships and containers, COSCO in particular is well placed to do that, potentially increasing its market share even if the value of its business reduces.

As a result, it is unlikely that this action will create widespread inflation and may actually reduce the cost of shipping which has not yet settled to its pre-pandemic levels.

Further reading:

1. https://www.porttechnology.org/news/cosco_triples_market_share_in_three…
2. https://en.coscoshipping.com/col/col6923/art/2025/art_6270be1a106e4393a…
3. https://www.tradewindsnews.com/law/here-s-how-much-of-blacklisted-cosco…

Entities Identified as Chinese Military Companies Operating in the United States in
Accordance with Section 1260H of the William M. (“Mac”) Thornberry National Defense
Authorization Act for Fiscal Year 2021 (Public Law 116-283)1

*
360 Security Technology Inc. (Qihoo 360)
Aerospace CH UAV Co., Ltd (CH UAV)
Autel Robotics Co., Ltd.
Aviation Industry Corporation of China Ltd. (AVIC)
AVIC Aerospace Systems Co., Ltd.
AVIC Airborne Systems Co., Ltd. (formerly China Avionics Systems Co., Ltd.)
AVIC Asset Management Corporation Ltd.
AVIC Aviation High-Technology Company Limited (AVIC Aviation Hi-Tech)
AVIC Electromechanical Systems Co. Ltd.
AVIC Heavy Machinery Company Limited (AVIC Heavy Machinery)
AVIC JONHON Optronic Technology Co., Ltd. (AVIC Jonhon)
AVIC Shenyang Aircraft Company Limited (AVIC Shenyang)
AVIC Xi’an Aircraft Industry Group Company Ltd. (AVIC Xi’an)
Changhe Aircraft Industries (Group) Co., Ltd.
Jiangxi Hongdu Aviation Industry Co., Ltd. (Hongdu Aviation)
Shenyang Aircraft Design Institute
Xi’an Aircraft Industry Group Co., Ltd.
Zhonghang Electronic Measuring Instruments Company Limited (ZEMIC)
Baicells Technologies Co., Ltd.
Beijing Zhidao Chuangyu Information Technology Co., Ltd. (Knownsec)
BGI Group
BGI Genomics Co., Ltd. (BGI)
Forensic Genomics International (FGI)
MGI Tech Co., Ltd. (MGI)
ChangXin Memory Technologies, Inc. (CXMT)
Chengdu JOUAV Automation Tech Co., Ltd. (JOUAV)
Chengdu M&S Electronics Technology Co., Ltd. (M&S Electronics)
China Aerospace Science and Industry Corporation Limited (CASIC)
Addsino Co., Ltd.
1 Hesai Technology Co., Ltd. was previously identified as and remains a Chinese military company operating in the
United States in accordance with Section 1260H of the William M. (“Mac”) Thornberry National Defense
Authorization Act for Fiscal Year 2021 (Public Law 116-283) as reported in 89 Fed. Reg. 86230 (October 29, 2024).
Aerospace Precision Products Co., Ltd.
Aerosun Corporation (Aerosun)
Aisino Corporation
China Aerospace Automotive Co., Ltd.
China Cargo Airlines Co., Ltd.
China Communications Construction Group (Limited) (CCCG)
China Airport Construction Group Corporation
China Communications Construction Company Limited (CCCC)
China Communications Constructions USA, Inc.
China Traffic Construction USA, Inc.
John Holland Group Pty Ltd.
John Holland Services Pty Ltd.
China Construction Technology Co., Ltd. (CCTC)
China COSCO SHIPPING Corporation Limited (COSCO SHIPPING)
COSCO SHIPPING (North America) Inc.
COSCO SHIPPING Finance Co., Ltd.
China Electronics Corporation (CEC)
China International Information Services Ltd.
China Electronics Technology Group Corporation (CETC)
Anhui Sun Create Electronics Co., Ltd.
Cheng Du Westone Information Industry Co., Ltd.
GLARUN Technology Co., Ltd.
Guangzhou GCI Science & Technology Co., Ltd.
Hangzhou Hikvision Digital Technology Co., Ltd. (Hikvision)
Phoenix Optics Company Limited
Shanghai East China Computer Co., Ltd.
Taiji Computer Co., Ltd.
China General Nuclear Power Corporation (CGN)
China International Marine Containers (Group) Co., Ltd. (CIMC)
China Mobile Communications Group Co., Ltd. (China Mobile Comm)
China Mobile Limited (China Mobile)
China National Chemical Corporation Ltd. (ChemChina)
China National Chemical Engineering Group Corporation (CNCEC)
China National Chemical Engineering Co., Ltd.
China National Nuclear Corporation (CNNC)
China National Offshore Oil Corporation (CNOOC)
CNOOC China Limited (CNOOC China Ltd.)
CNOOC International Trading Co., Ltd. (CNOOC International Trading)
China North Industries Group Corporation Limited (Norinco Group)
Harbin First Machinery Group Ltd.
Inner Mongolia First Machinery Group Co., Ltd. (Inner Mongolia)
China Shipbuilding Trading Co., Ltd. (CSTC)
China South Industries Group Corporation (CSGC)
Costar Group Co., Ltd. (Costar)
Heilongjiang Northern Tools Co., Ltd.
China SpaceSat Co., Ltd. (China SpaceSat)
Oriental Blue Sky Titanium Technology Co., Ltd.
Xi’an Aerospace Tianhua Data Technology Co., Ltd.
China State Construction Engineering Corporation Limited (CSCEC)
China Construction America, Inc.
China State Shipbuilding Corporation Limited (CSSC)
China Telecom Group Co., Ltd. (China Telecom)
China Telecom Corporation Limited
China Three Gorges Corporation (CTG)
China United Network Communications Group Co., Ltd. (China Unicom)
China Unicom (BVI) Co., Ltd.
China Unicom (Hong Kong) Limited (China Unicom HK)
China Unicom Group (BVI) Co., Ltd.
China United Network Communications Co., Ltd.
CloudWalk Technology Co., Ltd. (CloudWalk)
Commercial Aircraft Corporation of China Limited (COMAC)
Beijing Aeronautical Science & Technology Research Institute (Beijing Research Center)
COMAC America Corporation (CAC)
Shanghai Aircraft Manufacturing Co., Ltd. (Assembly Manufacturing Center)
Contemporary Amperex Technology Co., Ltd. (CATL)
CRRC Corporation Limited (CRRC)
CSSC Offshore & Marine Engineering (Group) Company Limited (COMEC)
Guangzhou Wenchong Shipyard Co., Ltd.
Huacheng (Tianjin) Ship Leasing Co., Ltd.
Dawning Information Industry Co., Ltd. (Sugon)
Global Tone Communication Technology Co., Ltd. (GTCOM)
GTCOM Technology Corporation (GTCOM-US)
Guizhou Aviation Technical Development Co., Ltd. (Guizhou Aviation Tech)
Huawei Investment & Holding Co., Ltd. (Huawei Holding)
Huawei Technologies Co., Ltd. (Huawei)
Inspur Group Co., Ltd. (Inspur)
NetPosa Technologies, Ltd. (NetPosa)
Origincell Technology Co., Ltd.
Quectel Wireless Solutions Co., Ltd.
SDIC Intelligence (Xiamen) Information Co., Ltd.
Xiamen Meiya Zhongmin Electronic Technology Co., Ltd.
Semiconductor Manufacturing International Corporation (SMIC)
Better Way Enterprises Limited
China IC Capital Co., Ltd.
Magnificent Tower Limited
Semiconductor Manufacturing International (Beijing) Corporation (SMIC Beijing)
Semiconductor Manufacturing International (Shenzhen) Corporation (SMIC Shenzhen)
Semiconductor Manufacturing International (Tianjin) Corporation (SMIC Tianjin)
Semiconductor Manufacturing North China (Beijing) Corporation
Semiconductor Manufacturing South China Corporation (SMIC South China)
SilTech Semiconductor Corporation
SMIC Holdings Limited (SMIC Holdings)
SMIC Semiconductor Manufacturing (Shanghai) Co., Ltd (SMIC Shanghai)
SMIC, Americas
SenseTime Group, Inc.
Shanghai Yitu Network Technology Co., Ltd. (Yitu)
Shenzhen DJI Innovation Technology Co., Ltd. (DJI)
Shenzhen Dajiang Baiwang Technology Co., Ltd.
Sinotrans & CSC Holdings Co., Ltd.
Tencent Holdings Limited
Wuhan Geosun Navigation Technology Co., Ltd. (Geosun)
Yangtze Memory Technologies Co., Ltd. (YMTC)
Zhejiang Dahua Technology Co., Ltd. (Dahua)
Chengdu Dahua Wisdom Information Technology Co., Ltd.
* Subsidiaries Listed with Parent Companies
The Following Previously Listed Entities Did Not Meet the Requirements of Section 1260H
of the William M. (“Mac”) Thornberry National Defense Authorization Act for Fiscal 2021
(Public Law 116-283) Because They Do Not Operate Directly or Indirectly in the United
States as Mandated by Section 1260H(a).
Beijing Megvii Technology Co., Ltd. (Megvii)
China Marine Information Electronics Company Limited (China Marine Info Elec)
China Railway Construction Corporation Limited (CRCC)
China State Construction Group Co.
China Telecommunications Corporation
ShenZhen Consys Science & Technology Co., Ltd. (Consys)