“Hidden equipment” on merchant ships: U.S. officials referred to long-haul shipping to collect military communications intelligence for Beijing

Senior U.S. government officials revealed to Reuters on September 1 that China’s state-owned long-haul shipping giant has installed and used hidden advanced signal intelligence equipment on some merchant ships to collect military communications information near the coastline of countries such as the United States. These devices are not referred to as ordinary maritime communications hardware, but are used to capture communication signals, study changes in encryption technology and monitor key maritime channels.

The sensitivity of this claim is not that a vessel carries a special antenna, but that long-distance shipping itself is one of the world’s largest state-owned shipping networks. Its vessels have long traversed major ports in Europe, North America and Asia, and are deeply embedded in the global logistics system through port investments and route networks. If a commercial fleet simultaneously carries on intelligence gathering functions, ordinary cargo vessels could become a low-visibility, long-term presence, without military deployment, mobile surveillance platform near foreign coastlines.

How hidden devices turn merchant ships into surveillance stations

Two senior U.S. officials said that intelligence cooperation between the U.S. Navy and Beijing has been ongoing for decades, with advanced equipment on board collecting communications signals from ships and aircraft in Europe, North America and Asia.The U.S. assessment believes that this information can help Beijing grasp “the development of military communications technology and encryption technology” while monitoring maritime routes that are important for trade and military navigation.

The advantages of such platforms come precisely from business identity. Military ships close to foreign coastlines are easily alert, intelligence aircraft are also restricted by routes and diplomacy, and container ships legally access global ports, slopes and routes every day. They are able to repeat across the same ocean for a long time and carry a large number of electronic devices under the name of commercial operations.

U.S. officials did not disclose models of equipment or display photographs or technical parameters, but their description corresponds to a long-term study by the U.S. Naval War Academy on the militarization of Chinese merchant ships. China Maritime Report No. 46 released in April 2025 noted that the Chinese maritime militia is using intelligence gathering as a core task, and that the U.S. Liberation Army researchers have discussed carrying intelligence personnel on ocean fishing vessels and Chinese-owned or operated merchant ships; the report concluded that the potential intelligence, surveillance and reconnaissance capabilities of overseas commercial ships are “probably already taking place.”

Business network itself is a global touchpoint.

As of the end of 2025, the company operates or manages 387 landing sites in 40 ports worldwide, 238 of which are container landing sites, with an annual processing capacity of approximately 1.3 billion standard boxes; the network covers China, Europe, the Mediterranean, the Middle East, Southeast Asia, South America and Africa.

This business network, when combined with national intelligence needs, is worth far more than a single reconnaissance vessel. Commercial vessels can continuously record changes in the foreign military communications environment, and port assets provide fixed presence, access to equipment and logistics security conditions. A state-owned enterprise network covering hundreds of ports, hundreds of ships and major maritime hubs naturally has global accessibility that traditional intelligence agencies can hardly replicate in the long run.

The U.S. Department of Defense's suspicion of long-distance shipping has long surpassed general commercial competition. In January 2025, long-distance shipping was included in the list of "Chinese military enterprises" established by the U.S. Department of Defense in accordance with Section 1260H. An updated public statement in 2026 further stated that long-distance shipping is directly owned and controlled by the State Council Committee, carried out related activities on behalf of the Liberation Army and indirectly related to the Chinese defense science and technology industry system; therefore, the U.S. has recognized it as a contributor to the military integration of the Chinese defense industry base.

This recognition itself is not equivalent to comprehensive economic sanctions, but will trigger U.S. defence procurement restrictions and strengthen other governments and enterprises’ review of the safety attributes of long-range and medium-range maritime transport. It is worth noting that some subsidiaries such as Middle-Range Maritime Finance Limited are removed from the list adjustment in 2026, while the Middle-Range Maritime Group itself remains within the relevant military recognition framework.

There is no clear firewall between intelligence obligations and the identity of state enterprises.

Chinese law requires organizations and citizens to support and assist national intelligence work according to the law.There is no institutional separation between commercial operations and national security for a company that is controlled by a central state-owned system and at the same time occupies an important position in global ports and shipping networks, as Western multinationals often emphasize.

China’s long-range shipping company denied the allegations on September 4, saying that all of the group’s ship-bound equipment serves legitimate commercial functions such as navigation, communication and emergency, and does not collect information from intelligence reports or military surveillance.The Chinese embassy in the United States also said that Beijing will not require companies or individuals to collect overseas intelligence in violation of local laws, and said the U.S. side said it had “no basis”.

But the controversy did not end with corporate denial.U.S. officials focused on a decades-long country-state-enterprise cooperation arrangement; the U.S. Naval War Academy’s public study showed from Chinese military theory and maritime militia practice that the U.S. Liberation Army has long regarded civilian fleets as a complementary resource for reconnaissance, surveillance and situation perception.

The real difficulty is the dependence of global trade on long-distance maritime transport

It has a large container fleet, international routes and overseas ports and is part of the U.S. and European trade networks.Isaac Kardon, a Chinese maritime strategy expert at Johns Hopkins University, told Reuters that removing the U.S. shipment from the supply chain and transport network could be equivalent to an “life-threatening operation” on the trade system.

This is one of Beijing’s most important strategic advantages: The same set of infrastructure can both perform normal business functions and have potential national security values because of its large scale and wide coverage; and it is difficult for foreign governments to quickly disconnect without paying a significant economic cost even if they discover risks.

From ports to commercial ships, from logistics data to communications environments, long-haul shipping has become one of China's most globalized state-owned enterprise networks.U.S. latest allegations reveal that if established, it would reveal not a few ships privately installed surveillance equipment, but a more mature civilian integration pattern: The state does not have to send military ships to every ocean, as long as the commercial fleet is there for a long time, global trade itself could become a cover and infrastructure for intelligence collection.