China Inside America's Ports

Shanghai Zhenhua Heavy Industries — ZPMC — is the world's dominant manufacturer of ship-to-shore container cranes. The company, which is majority-owned by China Communications Construction Company (CCCC), a state-owned enterprise, supplies an estimated 70–80 percent of the ship-to-shore cranes currently operating at American ports.

ZPMC's dominance is a product of scale, price, and timing. Beginning in the 1990s, ZPMC offered cranes at prices that undercut established competitors — including Finnish manufacturer Konecranes and German manufacturer Liebherr — by substantial margins. American ports, operating under budget constraints and procurement rules that prioritized cost, purchased ZPMC equipment in large numbers.

The cranes are large, complex machines. A modern ZPMC ship-to-shore crane stands roughly 300 feet tall, spans 200 feet across, and can lift containers weighing up to 65 tons. They are not easily or quickly replaced. A port that purchased ZPMC cranes in 2005 is likely still operating them today, and will continue to do so for years.

The national security concern regarding ZPMC cranes is not primarily that the cranes themselves could be weaponized — though that concern has been raised — but that the cranes contain sophisticated sensors, communications systems, and software that could, in theory, be used to collect data on cargo movements, port operations, and logistics patterns.

In February 2023, the Wall Street Journal reported that U.S. officials had discovered intelligence suggesting that ZPMC cranes at American ports contained communications equipment that could allow remote access. The report prompted congressional hearings and an executive branch review.

The Coast Guard, which has jurisdiction over port security, issued a Maritime Security Directive in February 2024 requiring operators of Chinese-manufactured cranes to take specific cybersecurity measures. The directive was classified, but its existence was publicly acknowledged. The Biden administration simultaneously announced a $20 billion initiative to reshore crane manufacturing, with a focus on supporting domestic production by Mitsui and other non-Chinese manufacturers.

ZPMC has denied that its cranes contain unauthorized surveillance capabilities. The company has offered to allow inspections and has disputed the characterization of its equipment as a security risk. The underlying concern — that equipment manufactured by a company with ties to the Chinese state and subject to Chinese law could be accessed or directed by Chinese authorities — has not been resolved by these denials.

Beyond the cranes, Chinese companies have a presence in the software systems that manage port operations. Terminal operating systems — the software that tracks container locations, schedules crane movements, coordinates truck and rail pickups, and manages the flow of cargo through a terminal — are a critical component of port infrastructure.

COSCO Shipping, a Chinese state-owned enterprise and one of the world's largest container shipping companies, operates terminals at several American ports, including the Port of Long Beach. Terminal operators have access to detailed cargo data — what is moving, from where, to where, and on whose behalf.

The Committee on Foreign Investment in the United States (CFIUS) has reviewed some Chinese investments in American port infrastructure. In 2019, CFIUS ordered a Chinese company to divest its stake in the Port of Long Beach terminal. However, CFIUS review is not comprehensive — it covers acquisitions but not all forms of commercial presence, and the threshold for triggering review has evolved over time.

China Communications Construction Company — CCCC — is the state-owned parent of ZPMC. CCCC is one of the world's largest construction and engineering conglomerates, with operations spanning ports, roads, bridges, railways, and dredging. It is also on the U.S. government's Entity List, added in August 2020 for its role in constructing artificial islands in the South China Sea in violation of international law.

The Entity List designation applies to CCCC itself, restricting U.S. companies from supplying technology to CCCC without a license. It does not automatically extend to ZPMC, which operates as a subsidiary. ZPMC is not itself on the Entity List, though it has been the subject of congressional scrutiny and proposed legislation.

The relationship between CCCC and ZPMC illustrates a broader challenge in U.S. policy toward Chinese state-owned enterprises: the corporate structure of Chinese SOEs is complex, with subsidiaries, affiliates, and joint ventures that may or may not be captured by designations targeting the parent.

The Biden administration's $20 billion crane manufacturing initiative, announced in February 2024, identified Mitsui E&S as the primary domestic manufacturer to be supported. Mitsui operates a facility in Texas and has received federal contracts to produce American-made cranes for U.S. ports.

However, the timeline for replacing ZPMC cranes across American ports is measured in decades, not years. A single large port may operate 20 or more ship-to-shore cranes. Replacing them requires not only manufacturing new cranes — a process that takes years per unit — but also the capital investment to purchase them and the operational disruption of installation.

In the near term, the policy response has focused on cybersecurity mitigation rather than physical replacement: network segmentation, software audits, restrictions on remote access, and enhanced monitoring. Whether these measures adequately address the underlying concern is a matter of ongoing debate among port security professionals and national security officials.

The crane and software questions sit within a broader picture of Chinese commercial presence in American logistics. Chinese shipping companies — COSCO, OOCL (owned by COSCO), Evergreen (Taiwanese), and others — carry a substantial share of U.S. container trade. Chinese-manufactured chassis, the wheeled frames that carry containers from ports to warehouses, are common in American intermodal logistics.

The concentration of Chinese presence in port infrastructure — cranes, terminal operations, shipping capacity, and logistics software — means that a significant portion of the data generated by American international trade flows through systems with some degree of Chinese commercial involvement. The national security implications of that data exposure are the subject of active policy debate.