Fear of Chinese Espionage Prompts GOP Hawks to Strike Back at Shipping Giant

After Pentagon Labels Chinese Shipping Giant a Military Company, Three House Republicans Urge DHS to Cancel COSCO's Qualship 21 Registration

COSCO, a Chinese Communist Party (CCP)-owned shipping and logistics company based in Shanghai, has received favorable treatment under a Coast Guard program designed to reward trusted business operators. But China hawks in Congress want to revoke those privileges after reports in September that the ships were being used to gather intelligence.

In an Oct. 14 letter, three top Republican lawmakers identified 11 Casco ships on the list of the Coast Guard's Qualified Shipping for the 21st Century program, known as Qualship 21, as of July 15, 2026 — despite the Pentagon identifying them as a Chinese military company.

House China Committee Chairman John Molnar, House Intelligence Committee Chairman Rick Crawford, R-Ark., and Rep. Carlos Gimenez, chairman of the Homeland Security Subcommittee on Transportation and Maritime Security, have pressed Homeland Security Secretary Marquin Mullen to revoke the registration of Casco Guard vessels in the Coast Program.

It follows a report in September that COSCO ships were using sophisticated, covert equipment to intercept military communications and gather information about encryption technologies off the coast of the United States.

The Coast Guard program was created to allow ships with strong safety and compliance records to undergo fewer routine inspections when entering U.S. ports. But the lawmakers argued in their letter that COSCO's alleged espionage activities and ties to China's military raise serious questions about why its ships qualify for preferential treatment.

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The allegations, attributed to senior US officials, have raised concerns that Chinese merchant ships could serve as intelligence-gathering platforms during operations near sensitive US military installations.

COSCO has denied the allegations as baseless and maintains that its communication and navigation equipment is used exclusively for legitimate business purposes. The company has said that none of its equipment has been used to intercept military communications or gather information.

COSCO is one of the largest shipping companies in the world and is owned by the Chinese government. Its extensive merchant fleet operates along major global trade routes, including routes serving US ports.

In January 2025, the Pentagon added COSCO to the Section 1260H list of Chinese military enterprises, citing its ownership by a Chinese government agency, activities purportedly on behalf of the People's Liberation Army and its contribution to Beijing's military-civilian fusion strategy, which seeks to harness civilian industries and technologies for military purposes.

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This designation does not automatically bar COSCO ships from entering US ports. But lawmakers are questioning why a company identified by the Pentagon as having ties to China's military should benefit from a Coast Guard program that reduces the frequency of inspections.

The Coast Guard earlier this year updated Qualship 21 eligibility rules and expanded the conditions under which vessels can be removed from the program, including certain associations with sanctioned entities. Lawmakers are now pressing DHS on whether Pentagon national security designations should also factor into eligibility decisions.

They also want to know whether the Coast Guard received intelligence alerts about COSCO's alleged surveillance operations before the allegations became public in September — and whether those alerts were considered when deciding whether to keep its ships' privileged status.

Lawmakers specifically questioned whether the Coast Guard reviewed COSCO's eligibility after the Pentagon designation and whether intelligence officials had identified similar risks with other Chinese or Hong Kong-based shipping operators.

Their concern extends to what the Coast Guard is doing to detect potential espionage on commercial vessels currently in US waters.

The letter questions whether authorities have boarded COSCO ships, checked crew members who may have been involved in intelligence gathering, or examined historic shipping lanes for unusual movements that could indicate surveillance activity.

Lawmakers also questioned whether the Coast Guard has enough legal authority to deal with suspected intelligence operations on foreign merchant vessels, or whether more coordination with other federal agencies is necessary.

The inquiry is beyond COSCO. Lawmakers have raised the possibility of removing Hong Kong from the list of offices eligible for a Coast Guard flag, citing concerns about Beijing's control over the territory.

The letter was copied to the Chief of National Intelligence and the Coast Guard Commander.

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