Ship-building contracts between one of China's top state-owned shipbuilding firms, China State Shipbuilding Corporation (CSSC) and Evergreen Marine Corp, a Taiwanese container shipping company, are reducing the costs of upgradation of the People's Liberation Army Navy (PLAN), a media report said.
CSSC is a key producer of vessels for the rapidly expanding PLAN and is thought to be building its third aircraft carrier, Taipei Times reported.
Taiwan's Evergreen Marine Corp has purchased 44 vessels from China since 2018, all but two of which were ordered from shipyards that produce Chinese warships, including CSSC, the report said citing a Center for Strategic and International Studies (CSIS) report.
CSIS, a Washington-based think tank said that while there is limited transparency on the flow of foreign capital in China's shipbuilding industry, "available evidence indicates that profits from foreign orders are likely to lower the costs of upgrading China's navy."
The centre further said foreign companies in France and other US-allied countries also buy ships from CSSC, which the US has placed on an investment blacklist for US citizens and companies due to its Chinese military links.
The report called the foreign contracts "a tangible threat to national security" for some democracies in the region, and said companies should consider US allies South Korea and Japan as alternative shipbuilding partners.
The study included commercial satellite imagery from February showing at least three Evergreen hulls under construction near China's newest aircraft carrier at CSSC's subsidiary Jiangnan shipyard near Shanghai.
Evergreen said in a statement that all of its container ship projects undergo international bidding and that its contracts with CSSC's commercial shipbuilding department were "completely different and separate" from CSSC's military department, Taipei Times reported.
"We believe the civil commercial shipbuilding activities have nothing to do with national naval projects," Evergreen said, adding that it discloses information about its orders to investors and authorities.
( With inputs from ANI )
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