A Chinese state-owned maker of heavy industrial equipment, including cranes used to move cargo on and off ships, has denied that its cranes pose cybersecurity risks to the U.S.
“[Our] cranes will not pose a network security risk to any port,” Shanghai Zhenhua Heavy Industries (ZPMC) said in a filing on Sunday. “These cranes are designed, manufactured, transported, installed, debugged, accepted and delivered in strict accordance with international standards.”
ZPMC’s statement comes after The Wall Street Journal reported last week that a congressional investigation of China-built cargo cranes had found cellular modems that don’t appear to support normal operations.
That revelation has further fueled concerns over potential national security threats posed by Chinese-made cranes, which account for 80% of all cranes used in U.S. ports. To address those maritime cybersecurity risks, the Biden administration last month said it would invest $20 billion to boost domestic production of ship-to-shore cranes. In tandem, the U.S. Coast Guard will step up inspections of cranes and be authorized to intervene if it suspects any “malicious cyber activity.”
Logistics risks are supply chain risks
As the U.S. government has moved to strengthen economic security amid rising geopolitical tensions and worries over dependence on its chief competitor China, focus has turned to the logistical operations and critical infrastructure underling key supply chains. American officials fear that Chinese-made cranes could allow Beijing to surveil trade flows and use that insight to its advantage, as well as potentially hijack the cranes remotely and wreck supply chain havoc.
The dominance of ZPMC, which commands some 70% of global market share for cargo cranes, is partly due to direct state support for the company. In 2018, ZPMC was identified by the Chinese government as a “single champion,” a label given to firms that have amassed formidable control over some critical industrial node. That designation also grants ZPMC access to preferential government policies, like subsidies and tax rebates — in turn helping it to outcompete foreign firms.
Meanwhile, as Washington scrutinizes ZPMC cranes, China is pushing ahead with efforts to build intelligent ports that are highly automated thanks to a network of connected ships, heavy equipment, and devices. And it’s not just looking to build these ports on its home shores: In November, the Chinese ministry of transportation called for “promoting China’s relevant [intelligent port] technologies and standards to ‘go global.’”
That means U.S. attempts to clamp down on potential China-related port security risks will have to go far beyond cargo cranes.