Long Beach: Proposed Lease by China Ocean Shipping Co. (COSCO) at Former Naval Base

Publication Date: June 1998

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Government

Type:

Coverage: California China

Abstract:

At issue is a proposal by the City of Long Beach, California, to build a container terminal at the site of a closed naval station and a lease (now canceled) for the terminal to be operated by China Ocean Shipping Company (COSCO). COSCO is a commercial shipping company owned by China. The proposed expansion of COSCO's facilities at the Port of Long Beach has raised issues concerning smuggling of guns by Chinese defense-related companies, proliferation of weapons of mass destruction, intelligence collection, and access to U.S. and Panamanian ports. In response, senior Administration officials have written that COSCO's use of a terminal to be built on former Naval property would not adversely affect national security. Meanwhile, a lawsuit to block construction of the terminal (not the lease with COSCO) has resulted in cancellation of the lease and delays in construction. The Navy completed its environmental impact report on May 26, 1998, which approved Long Beach's reuse plan. Some in Congress have raised national security concerns about this proposed lease. Other Members say that, based on intelligence briefings, the proposed lease poses no national security threats. The Defense Authorization Act for FY1998-1999 (P.L. 105-85) contains a compromise in Section 2826 that prohibits the Navy to convey the closed naval station to COSCO but allows the President to waive the ban. Current Congressional proposals by Rep. Hunter and Sen. Inhofe to the Defense Authorization Act for FY 1999 (H.R. 3616, S. 2057) would remove the waiver authority.