Dirty Business: China Ocean Shipping Company Allegedly Running Guns --and Who Knows What Else -- to Cuba
(Washington, D.C.): A front-page article in today's Washington Times identified the China Ocean Shipping Company (COSCO) as a key player in the ongoing, surreptitious delivery of weapons from China to Cuba. Ironically, this report comes shortly after the COSCO's CEO paid a visit to the Times for the purpose of disavowing widely reported connections between his company and the Chinese military.
According to the Times, Beijing's arms deliveries to Cuba have taken place on at least three separate occasions within the past several months. This pattern of reported transfers belie the claim that COSCO's activities are solely driven by the pursuit of profit, independent of the Chinese government's foreign policy agenda. Instead, it seems far more likely that COSCO -- a 100% Chinese state-owned enterprise (SOE) -- is doing precisely what its owners instruct it to do, i.e., supporting the PRC's goal of increasing military and economic collaboration between Havana and Beijing.
In a move that has, regrettably, become standard operating procedure for making certain Chinese SOE's more palatable to U.S. and overseas investors, COSCO created a wholly-owned subsidiary -- COSCO Pacific -- to establish a funding vehicle on the Hong Kong stock exchange. This and other so-called "Red Chips," however, generally remain largely under the influence of the parent company. The contention by some market observers that there is a genuine "firewall" between COSCO and COSCO Pacific is made still less plausible by the Times' identification of yet another COSCO subsidiary (COSCO Tianjin) as the transporter of sophisticated weaponry components to Pakistan in 1998.
American shareholders of COSCO Pacific now seemingly find themselves in the unsavory position of holding the stock of a subsidiary of a Chinese state-owned firm allegedly implicated in untoward international arms smuggling and possibly weapons-proliferating schemes. According to Thomson Financial Research Services, these investors include: the State Teachers' Retirement System of Ohio (that holds some 6 million shares); the Teachers' Retirement System of Texas; Nomura Asset Management; Morgan Stanley Emerging Market Fund; Putnam Investment Management; Goldman Sachs Core International Equity Fund; Credit Suisse Asset Management; and American Express Asset Management.
Should Bill Gertz's reports of alleged violations of U.S. law prove correct, Congress and/or the Bush Administration may feel compelled to deny access to the U.S. capital markets to COSCO and its publically traded subsidiaries as a highly leveraged and singularly effective penalty for activities that facilitate the military armament of terrorist-sponsoring states like Cuba in violation of U.S. law.
http://www.centerforsecuritypolicy.org/index.jsp?section=papers&code=01-F_43
Wow. I've never run across articles about a China-Cuba link, but it makes perfect sense. Especially electronic eavesdropping. I dind't know. Thanks for the articles.