Chinese Trojan Horse Tech Poses US Security Risk

April 4, 2023
Insights: Argus for Supply Chain Influence

Argus Reveals Global Trade Network with Significant Potential Spying Capability   

As automation becomes increasingly prevalent to streamline global trade, Chinese companies have emerged as major players in the production and distribution of such technology. Some of these companies have come under scrutiny due to concerns that they could use their technology to gather sensitive information that could impact U.S. military operations. 

The Wall Street Journal recently reported that the Pentagon had determined that Shanghai Zhenhua Heavy Industries (ZPMC), a Chinese company that produces cranes used in commercial and military ports worldwide, and its relationship with Microsoft poses a cause for concern. The article cited that “some national-security and Pentagon officials have compared ship-to-shore cranes made by the China-based manufacturer, ZPMC, to a Trojan horse.”  This identified risk is due to ZPMC’s sophisticated sensors, which could be utilized to track and monitor shipping information and other kinds of data tied to  U.S. military operations. In addition, the article identified concerns that ZPMC’s technology could provide China with the ability to control and disrupt global shipping.

The problem could go much deeper than Microsoft or the United States. Using Argus, we were able to identify relationships of ZPMC with Swiss, Norwegian, and Finnish companies operating in Asia, Latin America, and other parts of the world. 

ABB, a Swiss electrification and automation company, is an excellent example of how commercial partnerships can disseminate ZPMC’s technology globally. As recently as 2018, ABB integrated its remote supervision solutions and systems with ZPMC, providing its automated systems to ZPMC for cranes in South Korea and Colombia. Another example is Kongsberg Gruppen, a Norwegian defense contractor whose customers include the U.S. military.  Kongsberg Gruppen was awarded a contract in 2014 to supply and integrate all telecom and control systems for a vessel built at ZPMC’s shipyard. 

Argus also revealed that the Finnish company Cargotec partnered with ZPMC in 2019 to provide software and systems integration services for an intelligent container terminal project, with the potential to expand throughout India, Latin America, and elsewhere. Cargotec’s partnerships with Chinese companies also include a joint venture with the China State Shipbuilding Corporation (CSSC). CSSC has been identified as a Chinese military company by the U.S. Department of Defense and other ZPMC partners, including the China Communications Construction Company (CCCC). 

There is a vast network of Chinese entities operating in strategic ports, many benefiting from partnerships with western companies. China Unicom, for example, partnered with Ericsson and ZPMC to integrate 5G technology into smart harbor solutions. The Qingdao-based project utilizes data from over 30 high-definition cameras.

Each of these partnerships - visualized in the knowledge graph in Argus - offer a glimpse into a network that has allowed Chinese companies such as ZPMC to develop automated cranes that are now at the center of global trade. It is plausible that these could allow Chinese companies to gather strategic information about other companies and foreign states. The irony is that many layers of ZPMC’s technology come from the states concerned about it.

By leveraging public documents through advanced AI tools like Argus, risk analysts and open-source intelligence (OSINT) analysts can better understand the network of relationships between entities, enabling them to identify potential security risks and take proactive steps to mitigate them.

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