China Ocean Shipping Group Company (COSCO) is one of the world’s largest shipping companies, and the major vehicle supporting China’s manufacturing export economy. COSCO is also one of the largest state-owned enterprises, owned by the central government of the People’s Republic of China, and in recent years has formed many joint ventures with foreign governments and companies.
On 27 April 1961 in Beijing, the China Ocean Shipping (Group) Company (COSCO) was formed from a collection of state-owned shipping enterprises (SOE ????), including the Chinese-Polish Joint-Stock Shipping Company, itself founded in 1950 as one of the first Sino-foreign joint-owned enterprises. During the next two decades COSCO established international liner and container liner services to Europe, Asia, and eventually the United States, reestablishing past transportation and ownership ties to non-Communist countries and reintroducing direct transportation between China and the United States in 1979.
Now known as the “COSCO Group,” the company continued expanding in the 1990s, attracting minority-ownership shares through public listings on the Shanghai and Shenzhen stock exchanges and the Singapore exchange in 2004 and the Hong Kong exchange in 2005. COSCO Group currently comprises more than three hundred subsidiaries operating in all aspects of the shipping and transportation industry, including supporting research and financial services, with a reported combined value of $17 billion in 2008. The company is also a pioneer in supporting oceanographic and shipping research, including an expedition to Antarctica in 2005 and the construction of large semisubmerged container vessels. The group, China’s largest shipping company, operates a fleet of more than six hundred ships, with a shipping capacity of 35 million deadweight tons (DWT), plying trade to more than 1,300 ports in 160 countries and employing 80,000 people, including 5,000 non-Chinese. As with all of the nearly two hundred state-owned enterprises directly owned by the central government of the People’s Republic of China, its officers and directors are appointed by the Central Committee of the Chinese Communist Party. In recent years COSCO leaders have served as delegates to the National Party Congresses and the governmental National People’s Congress.
In bulk shipping COSCO has some two hundred vessels with total carrying capacity of 12 million DWT. In tanker shipping COSCO has eighteen tankers capable of shipping 1.8 million DWT, and among these are five of the “very large crude carriers” class (VLCC), each capable of holding more than 300,000 DWT. The group owns 1,200 land vehicles, 231 barges capable of carrying 187,000 DWT, 2.65 million square meters of stock yards, and warehouse space totaling 250,000 square meters. The group claims to be the eighth-largest container terminal operator in the world, with thirty-four berths around the world with a total annual throughput of 13 million containers. COSCO is a major shareholder in other Chinese state-owned enterprises, including those in ship repair, ship building, container construction, international finance, second-hand ship sales, and marine bunker construction and operation.
COSCO has often been the target of investigations by foreign governments and shipping industry associations that have accused it of unfair trade practices, including support in the form of subsidized credit and resources from the Chinese government. Nevertheless, foreign governments and corporations have formed many joint ventures with the shipping giant. COSCO estimates that it regularly conducts business with more than five thousand business enterprises globally. The nature of COSCO Group’s relationship with the Chinese government is not clear, however, because its internal ownership and management relationships are, as with many Chinese state-owned enterprise groups, famously unclear.
Further Reading
Bureau of Economics and Agreement Analysis. (1997). Economic analysis of China Ocean Shipping Co, 1994–1997. Washington, DC: Federal Maritime Commission.
COSCO. (2008). Retrieved April 12, 2008, from http://www.cosco.com/en
Meyer, M., & Xiaohui, Lu. (2005). Managing indefinite boundaries: The strategy and structure of a Chinese business firm. Management and Organizational Review, 1(1), 57–86.
Water can float a boat and sink it as well.
水能载舟，亦能覆舟
Shuǐ néng zài zhōu, yìn éng fù zhōu
Source: Lewis, Steven W.. (2009). COSCO Group. In Linsun Cheng, et al. (Eds.), Berkshire Encyclopedia of China, pp. 506–507. Great Barrington, MA: Berkshire Publishing.
COSCO Group (Zhōngguó Yuǎnyáng Yùnshū Gōngsī 中国远洋运输公司)|Zhōngguó Yuǎnyáng Yùnshū Gōngsī 中国远洋运输公司 (COSCO Group)
