U.S. Officials: Chinese Shipping Giant Uses Cargo Ships to Spy on Military Communications

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China’s state-owned shipping giant COSCO has secretly equipped commercial vessels with sophisticated technology to collect military communications near the United States and other countries, according to senior Trump administration officials.

Two U.S. officials told Reuters that COSCO has maintained a decades-long intelligence relationship with Beijing, allowing China to collect communications signals from ships and aircraft operating across North America, Europe and Asia.

The equipment aboard COSCO vessels consists of “sophisticated signals intelligence collection” systems rather than ordinary communications hardware, the officials said.

One official said the operation allows Beijing to gather intelligence about “military communications technologies and encryption developments.”

China can also use the information to monitor strategically important shipping lanes, conduct maritime reconnaissance and obtain early warning of potential foreign military targets, according to the officials.

COSCO did not respond to Reuters’ request for comment. The Chinese Embassy in Washington denied the allegations.

“We oppose vilifying China by peddling the so-called ‘intelligence collection’ narrative, which is totally baseless,” embassy spokesperson Liu Chang said.

Concerns about China’s use of its enormous commercial fleet for military purposes have been raised previously. A U.S. Naval War College report published in 2025 concluded it was likely that China’s People’s Liberation Army was using the country’s commercial shipping and fishing fleets for intelligence and surveillance operations.

The Pentagon placed COSCO on its list of companies linked to China’s military in January 2025. The designation restricts U.S. government procurement but does not impose formal economic sanctions.

Chinese law also requires companies to cooperate with government intelligence activities.

Despite the security concerns, COSCO remains deeply integrated into American trade. The company is one of the world’s largest shipping operators, regularly calls at U.S. ports and participates in terminal-service joint ventures at American ports.

That economic dependence could complicate efforts to restrict the company’s U.S. operations.

The allegations emerge ahead of a planned Washington summit between President Donald Trump and Chinese leader Xi Jinping later this month, when trade and national security issues are expected to be high on the agenda.

The administration previously proposed billions of dollars in fees on Chinese shipping companies, including COSCO, as part of an effort to rebuild America’s domestic shipbuilding and maritime industries. The plan was paused following Trump’s trade agreement with Xi last October.