ABB Under Congressional Scrutiny for Ties with Chinese Company

Switzerland-based technology company, ABB, has confirmed that it is facing congressional scrutiny in the United States over its relationship with Chinese state-owned company, Shanghai Zhenhua Heavy Industries (ZPMC). The company has been requested to provide testimony to lawmakers regarding its operations with Chinese state-owned companies while also collaborating with U.S. government agencies.

Congressional committees expressed concerns about intelligence, cybersecurity, and supply-chain risks in their letters to ABB. They specifically raised questions about ABB's software and technology used in ZPMC shipping cranes deployed in U.S. seaports.

In response, ABB stated on Friday that it is taking the committees' request seriously and is currently reviewing the content of the letter.

As news of the scrutiny broke, ABB shares experienced a drop of 3.5%, falling to CHF35.33 at 1414 GMT.

Shanghai Zhenhua Heavy Industries, also known as ZPMC, did not provide an immediate comment outside of business hours in China.

Earlier this year, The Wall Street Journal reported concerns raised by certain national-security and Pentagon officials who considered ZPMC's ship-to-shore cranes as potential security threats. These officials were worried that the cranes' sensors could be utilized for intelligence gathering through the registering and tracking of shipping containers. However, ZPMC representatives did not respond to the requests for comment at the time.

ABB's Involvement with Chinese Crane Technology Under Scrutiny

The Committee on Homeland Security and the Select Committee on the Chinese Communist Party have raised concerns regarding ABB's collaboration with ZPMC, a Chinese company, in installing ABB equipment and technology on cranes bound for the United States. The committees have emphasized that such practices are unacceptable and must be addressed expeditiously.

ABB, a renowned provider of software and hardware for cranes used in ports worldwide, including the United States, has defended its position. The company states that its crane software technology is not dependent on any particular supplier and can be installed on cranes manufactured by various major crane builders, including Chinese companies. ABB further clarifies that it is not directly involved in the procurement of cranes by U.S. ports; instead, these cranes are acquired from Chinese and other companies.

According to the Select Committee on the Chinese Communist Party, ZPMC controls almost 80% of the ship-to-shore cranes at U.S. maritime ports, adding weight to the ongoing discussion between ABB and U.S. lawmakers. The interaction between the parties traces back to July 2023.

The committees assert that ABB has yet to address crucial inquiries despite providing over 650 documents concerning its activities in China in August. It is of utmost importance, according to the lawmakers, that ABB clarifies its connections with People's Republic of China (PRC) state-owned enterprises and whether the company can be entrusted to continue serving U.S. government agencies while engaging with entities that are owned, controlled, subsidized, or influenced by the PRC.