It would seem that there is a worry about Chinese owned companies making the equipment that is necessary to run US ports. There is a strong possibility that they could cripple the very ports that the US needs, though most people are not aware of how the Chinese government controls these businesses, as it is not the way it is done in the US. In the US, private businesses are just that, but in China, the government either is a direct partial owner or has groups within the company dictating government demands. This means every product made in China goes to enrich the government.
National Security Worries
Here, via a press release by Rep. Carlos Gimenez, is what he had to say about the Port of Miami and the Chinese made equipment there.
“I am especially worried by the security vulnerabilities that exist with port equipment that is manufactured or installed in the People’s Republic of China. The ship-to-shore cranes towering over our docks — while instrumental to our port operations — are a focal point of that concern. Most of the U.S. port ship-to-shore cranes – nearly 80 percent – are made by ZPMC, a Chinese state-owned enterprise under the direct control of the Chinese Communist Party. This near-monopoly allows for ZPMC to compromise U.S.-bound cranes that could cause malfunction or facilitate cyber espionage at U.S. ports. This situation not only presents cybersecurity threats but also supply chain vulnerabilities that could be exploited by those who wish to inflict damage on our nation that could have lasting impacts.
Unfortunately, Communist China’s influence in the supply chain extends beyond state-owned enterprises like ZPMC. Third-party companies often create the internal operational components for these ship-to-shore cranes.
These components include programmable logic controllers which control many ship-to-shore crane systems, as well as crane drives and motors. In almost all cases, ZPMC requires that these companies ship their components to the PRC where they can be installed by ZPMC engineers or technicians.
As my subcommittee has discussed in previous hearings, the proliferation of port equipment and operational technology manufactured or installed by engineers in the PRC introduces significant supply chain vulnerabilities into our Maritime Transportation System.
As a country, we must acknowledge and assess these risks, threats, and vulnerabilities and decide how to effectively respond.
In February, the Biden administration signed an executive order providing the U.S. Coast Guard with new authorities to respond to potential malicious actors targeting our maritime sector—and particularly those from the PRC. While I commend the administration on this initial action, I believe we need to continue examining this crucial topic and ensure that our ports are protected from security threats.
To do so, I have brought together a group of members from the China Select Committee and the Committee on Homeland Security, to investigate some of the vulnerabilities associated with PRC-manufactured port cranes and the consequences of having a supply chain that is overly reliant upon equipment sourced from our greatest geopolitical competitor.
Additionally, I have introduced legislative solutions – such as my Port Crane Security and Inspection Act – to ensure the U.S. Coast Guard and other federal agencies responsible for safeguarding maritime ports have the tools and authorities necessary to deter hostile actors from operating against our ports.”
China Control
Few people understand how the China government, which is also the Chinese Communist Party or CCP, controls businesses. Here, via the Guardian is a short explanation.
“In 2016, Xi chaired a national meeting that cleared the way for a more expansive role for the party in enterprise. In 2017, the measures were further extended, with the body overseeing big state companies directing them to write the party into their articles of association. In 2018, the securities regulator followed up by issuing a new corporate governance code requiring listed firms, at home and abroad, to include in their internal guidelines an expansive role for the party. Many Chinese companies listed in Hong Kong also wrote the party’s role into their articles of association.
In some ways, codifying in public documents the party’s role in managing companies was both an instance of rare transparency and part of an increasing trend of the party openly displaying its power. In the past, Chinese state-owned listed companies had customarily filed misleading prospectuses ahead of their stock exchange listings, omitting the party’s pivotal role in the hiring and firing of senior executives. Similarly, company boards had long been legally and theoretically independent of the party, but not in practice. “The same individual who is chairing a party committee meeting on a Monday might well be chairing a board meeting later in the week,” notes a 2018 report on Chinese corporate governance.
There has always been an awkward fit between western notions of corporate governance and the party state’s insistence on having a role in companies. “It is rather like drawing a tiger with a cat as a model,” said one Chinese commentator. But the direction of policy under Xi has been clear: the power that the party had over business decisions and personnel in state firms, once wielded behind the scenes, would not only be strengthened. The party’s power would also be exercised explicitly.
Xi’s shadow now looms increasingly large over private firms as well. In March 2012, a few months before taking over as general secretary, Xi delivered a speech in which he stressed the need to increase the number of party bodies inside private business. Around the same time, new details for “party building” in enterprises were released, calling “for the party secretary to participate in and attend important executive-level meetings”.
The party’s efforts to place itself inside private companies have been, according to its own figures, very successful. One recent survey by the Central Organisation Department, the party’s personnel body, found that 68% of China’s private companies had party bodies by 2016, and 70% of foreign enterprises. Although these figures sound high, they don’t match the targets the party has set for itself. In Xi’s old stamping ground of Zhejiang, for example, officials set a target in August 2018 to have cells inside 95% of private businesses. There was a need, the survey said, to retain the revolutionary spirit inside the companies as their ownership was handed on to the next generation.”
People need to be aware that by not paying attention to what they buy, they are strengthening a totalitarian government that harms even their own citizens. So many people and governments bow down to the Chinese that it is time to push back. It is as simple as paying attention to where things are made and not buying those made in China. Demand the same from local government and more. It will take time, but it can be done.
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