China’s state-owned shipping giant COSCO has been accused of using concealed surveillance equipment aboard commercial vessels to collect intelligence for Beijing, according to U.S. officials. The allegations suggest that COSCO maintains an intelligence-gathering relationship with the Chinese government that spans decades. Two senior Trump administration officials told Reuters that the program allows Beijing to collect communications signals from ships and aircraft operating across North America, Europe, and Asia.
The equipment allegedly installed aboard COSCO vessels goes beyond standard communications technology found on commercial ships. U.S. officials described it as “sophisticated signals intelligence collection” equipment capable of helping China gather information about military communications technology and advances in encryption. One official said China can use the information to improve maritime reconnaissance, identify potential foreign military targets, and obtain early-warning information. Such intelligence could also strengthen Beijing’s position in territorial disputes.
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The Chinese Embassy in Washington strongly rejected the U.S. allegations. “We oppose vilifying China by peddling the so-called ‘intelligence collection’ narrative, which is totally baseless,” embassy spokesperson Liu Chang told Reuters. The embassy said Beijing would never require a company or individual to collect intelligence abroad in violation of local laws.
COSCO did not respond to Reuters’ request for comment. The allegations add another layer to longstanding U.S. concerns about connections between China’s enormous civilian maritime industry and its military and intelligence operations. The Pentagon placed COSCO on its Section 1260H list of companies it considers linked to China’s military in January 2025. The Defense Department said the designation is part of an effort to counter China’s “Military-Civil Fusion” strategy, through which Beijing seeks to make civilian technology and expertise available to the PLA.
Despite the designation, COSCO remains deeply embedded in global commerce. It continues to call at American ports and participates in terminal-service joint ventures in the United States. That economic footprint could make any U.S. attempt to substantially restrict COSCO particularly complicated. “Taking COSCO out of our supply chains and transport networks could be life-threatening surgery to U.S. trade networks,” Isaac Kardon, an expert on Chinese maritime strategy at Johns Hopkins School of Advanced International Studies, told Reuters.
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While the allegations focus on surveillance technology, the broader context involves complex commercial entanglements. A report from the U.S. Naval War College in April 2025 examined how China’s fishing and commercial fleets could be used for intelligence, surveillance, and reconnaissance. The report said People’s Liberation Army experts have advocated placing intelligence personnel aboard Chinese vessels operating overseas and concluded that such activity was likely already occurring.
China’s extensive commercial fleet presents a dual-use challenge for Western governments. The vessels are legally commercial entities that handle international waters, yet they may be leveraged for state purposes. This creates a friction point between economic interests and national security imperatives, especially as the U.S. seeks to reduce reliance on Chinese logistics infrastructure.