After two committees of the U.S. House of Representatives raised safety concerns about Chinese port cranes exported to U.S. ports, Shanghai Zhenhua Heavy Industries (ZPMC), a Chinese state-owned enterprise known for its production of special heavy-duty cranes for ports, issued a statement on March 9 denying that it produced heavy-duty cranes. This poses a cybersecurity risk to the ports used.
In mid-to-late January, the U.S. House of Representatives Homeland Security Committee and the Ad Hoc Committee on Strategic Competition between the United States and China sent a letter to General Electric-Brown-Boveri (ABB), a multinational company formed by the merger of two Swedish and Swiss engineering giants, inviting ABB to attend public hearings before the U.S. Congress to explain and clarify the company’s relationship with Shanghai Zhenhua Heavy Industries, which raised “significant concerns” from U.S. congressional committees about the security risks this relationship may pose to U.S. ports.
“Shanghai Zhenhua Heavy Industry takes the U.S. concerns seriously and believes that these reports can easily mislead the public without sufficient review,” said a statement bearing the company’s seal.
“The cranes provided by Shanghai Zhenhua Heavy Industry will not pose a cyber security risk to any port. Shanghai Zhenhua Heavy Industry has always strictly abided by the laws and regulations of relevant countries and regions and operates in compliance with the law on this basis,” the statement also said.
Shanghai Zhenhua Heavy Industries, listed on the Shanghai Stock Exchange, is one of the world’s largest manufacturers of seaport machinery and heavy equipment. The company has six production bases in Shanghai and Jiangsu and about 20 complete equipment transport ships ranging from 60,000 tons to 100,000 tons, which can transport large equipment around the world. However, the heavy-duty cranes produced by the company for ports are usually equipped with control and electrification equipment, such as sensors produced by ABB.
The influential Wall Street Journal in the United States reported a year ago that U.S. officials were increasingly concerned that Chinese-made giant cranes used at ports across the United States, including several used by the U.S. military, could fall into the hands of the Chinese government. A spy tool capable of performing covert missions in full view of the public.
The report stated that some officials from the U.S. National Security Department and the Department of Defense compared the port cranes produced by Shanghai Zhenhua Heavy Industry to a “Trojan horse.” They argue that the cranes produced by the company are well-made and cheap, but the cranes are equipped with sophisticated sensors that can be used to record and track the origin and destination of containers at the port. Therefore, “the United States is concerned that China can obtain information about materials shipped into or out of the United States and used to support U.S. military operations around the world.”
The report quoted former senior U.S. counterintelligence official Bill Evanina as saying that the cranes could also provide remote access to those who want to interfere with the flow of goods.
Two committees of the U.S. Congress sent a letter to ABB CEO Bjorn Rosengren in January this year, directly expressing concerns about Shanghai Zhenhua Heavy Industry’s installation of ABB equipment on container cranes sold to U.S. ports and inviting ABB executives to go to the United States to testify at a congressional hearing on the matter.
In the letter, the congressional committees said they wanted to investigate “cybersecurity risks, foreign intelligence threats, and supply chain shortcomings at U.S. seaports.”
Bloomberg quoted Redburn Atlantic analyst James Moore as saying at the time that the U.S. investigation was notable because “European industry has a history of U.S. investigations resulting in large fines.”
The media reported that although the United States and China are the world’s two largest economies, they often accuse each other of conducting cyber attacks or stealing trade secrets. The U.S. government announced this year that it had thwarted Chinese hackers’ penetration and cyber attacks on U.S. infrastructure and is currently investigating the national security risks that Chinese-made electric vehicles may pose. Chinese telecom giants Huawei, ZTE, and other companies have also been excluded from the construction of 5G networks in the United States due to national security concerns.
Shanghai Zhenhua Heavy Industries said in a statement that the cranes supplied by the company are used in ports around the world, including the United States.
“These cranes are designed, manufactured, transported, installed, commissioned, and delivered upon acceptance in strict accordance with international standards, applicable laws and regulations, and technical specifications determined by customers,” a statement from Shanghai Zhenhua Heavy Industry said.
China is ABB’s second-largest market, accounting for 16% of ABB’s annual sales, while the United States is ABB’s largest market, with 24% of its revenue coming from the US market.
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