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Carol Yang

Sylvia Ma

Beijing has announced sanctions against a US ally over its alleged role in constraining China’s maritime and shipbuilding industries – marking an escalation in tensions in the strategic sector.
The move came as Washington enforced port fees targeting China-built or operated vessels on Tuesday, and follows a commitment Beijing made in a previous regulatory update.
China placed five US-based subsidiaries of the South Korean shipping giant Hanwha Ocean – including Philly Shipyard, which the firm acquired last year – on a countermeasures list, accusing them of cooperating with Washington in its curbs on China’s maritime sector, according to a statement from the Ministry of Commerce on Tuesday.
Following China’s announcement, Hanwha Ocean’s stock price briefly fell by as much as 8 per cent on South Korea’s Kospi, the country’s main stock market index.
Beijing’s sanctions against Hanwha Ocean – a major South Korean shipbuilder that closely cooperates with the US as Washington pushes to curb Chinese dominance in the sector – enforce the revised rule, which grants China the authority to take countermeasures.
“Hanwha’s US-based subsidiaries have assisted and supported the US government in conducting the 301 investigation and imposing measures against China’s maritime, logistics and shipbuilding industries. China expresses strong dissatisfaction and firm opposition,” the spokesperson of China’s commerce ministry said on Tuesday.
Targeting [the subsidiaries of] Hanhwa may be a warning to US allies that they shouldn’t go too close with the US
Xu Tianchen, Economist Intelligence Unit
Beijing took action in line with the country’s anti-foreign sanctions law and related regulations, the spokesperson said.
The move prohibits organisations and individuals in China from engaging in transactions or cooperation with them, he added.
At the end of September, China pledged to impose countermeasures against any country or region that enacts or supports discriminatory bans, restrictions or similar measures targeting its operators.
The spokesperson also urged the US and related companies to respect facts and multilateral trade rules, adhere to market economy principles and fair competition and stop undermining China’s interests.
Xu Tianchen, senior China economist at the Economist Intelligence Unit, said it was “surprising” that Beijing has shifted its “tactics from being reactive to being assertive”.
“Targeting [the subsidiaries of] Hanhwa may be a warning to US allies that they shouldn’t go too close with the US”, he said, calling the firm “one of the biggest beneficiaries of the US’s port fees on Chinese ships”.
Last December, Hanwha Ocean made a major investment to acquire Philly Shipyard in Philadelphia, which is currently the only US shipyard operated by a South Korean company and one of the subsidiaries targeted by the sanctions.
The US has sought support from its allies – including South Korea – to support its struggling shipbuilding sector, where the East Asian country ranks second only to China in global market share.




Earlier this year, Seoul pledged US$150 billion in investment to help its shipbuilders enter the US market, with Hanwha Ocean among the companies seeking to cooperate with American shipyards.
Meanwhile, China has also launched an investigation into the impact of the US Section 301 probe on its shipping, shipbuilding and related industries and supply chains, the Ministry of Transport said in an announcement.
China’s investigation announced on Tuesday examines whether any enterprises, organisations and individuals have implemented, assisted or supported discriminatory actions taken by the US against China, the ministry added, noting that corresponding countermeasures would be applied based on the findings.
Ren Yanbing, a partner at law firm Dentons’ Guangzhou office, said China ultimately aims to leverage its port throughput advantage to protect its shipbuilding industry, pushing back against US measures under the Section 301 investigation.
Beijing still has additional tools at its disposal, including measures to regulate beneficiaries who try to exploit Washington’s probe for unfair competitive gains, said Ren, who also specialises in maritime law.


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Hanwha Ocean stands accused of aiding Washington in its curbs on Chinese shipping


Hanwha Ocean stands accused of aiding Washington in its curbs on Chinese shipping.


China-US shipping dispute deepens as Beijing sanctions subsidiaries of South Korean giant

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Hanwha Ocean stands accused of aiding Washington in its curbs on Chinese shipping

Hanwha Ocean stands accused of aiding Washington in its curbs on Chinese shipping