Mostly limericks, based on current events.

Friday, March 10, 2006

China Ocean Shipping Company Allegedly Running Guns to Cuba

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.