Editor’s note: This blog post has been cross-published with the Wilson Center. The views expressed are those of the author and do not necessarily represent the views of AidData.
In July 2023, AidData’s Harboring Global Ambitions report examined the linkage between China’s development financing of port projects and potential future naval bases. This analysis follows up on that research, to explore where else Chinese development finance may have national security implications for recipient countries.
Since 2000, Chinese state-owned entities have provided 210 grants and loans for the acquisition and installation of scanner equipment in 91 low- and middle-income countries. China’s distribution of scanners has enabled recipient countries to minimize security risks (such as detecting contraband and explosives) and increase revenue for local customs authorities. Despite these benefits, scanning equipment provided by Chinese enterprises with governmental oversight could give Chinese authorities insight into sensitive data, from biomedical information to military transshipments.
These scanners have diverse uses, ranging from the medical scanners and thermal scanners used in hospitals during the COVID-19 pandemic to the scanners at ports and airports that millions of Americans and their allies pass through each year. 108 scanners tracked in this analysis are customs equipment used at seaports, airports, railway stations, and border crossings.
A new analysis of data on scanners drawn from AidData’s Global Chinese Development Finance Dataset reveals that China’s provision of aid and credit for the dissemination of customs inspection equipment abroad—from providers like Nuctech, a Chinese partially state-owned company—is extensive. Despite increasing scrutiny of Chinese equipment used in critical infrastructure like ports, scanners provided by Chinese companies and financed by Chinese donors and lenders are still being widely distributed around the globe. China’s global scanner distribution poses potential national security risks at global seaports, airports, and border crossings.
Scanners as customs inspection equipment
China’s provision of customs inspection equipment is far-reaching: at least 65 low- and middle-income countries received this equipment financed via grants and loans from China between 2000 and 2022. The scanners can be found in locations ranging from Serbia and Albania in Eastern Europe, to Cambodia and Laos in Southeast Asia, to countries in Central Asia, the Middle East, North Africa, and the Pacific. Over the past two decades, China provided at least $1.67 billion (constant 2021 USD) of aid and credit for customs inspection activities in recipient countries.
41 of the 108 grant- and loan-financed customs activities were directly related to seaport customs inspection, 25 to border crossings and customs, 24 to airports, and 4 to railway stations. Some of these activities supported multiple facilities (for example, airports and seaports), and at least 36 provided customs inspection equipment for use at unspecified destinations. As part of this analysis, 121 locations of individual scanners and customs equipment were geolocated.
Donations and zero-interest loans appear to be a deliberate business strategy of Chinese government entities to facilitate the acquisition, installation, and use of customs inspection equipment produced by Chinese companies. Of the 108 customs inspection equipment-related activities tracked, 89 (or 82.4%) constituted donations, with the remainder provided through loans from Chinese agencies for recipients to purchase scanners from China. 44 of these donations were financed directly by China’s Ministry of Commerce (MOFCOM).
Only 19 of the activities were financed with loans, and on very favorable terms. The average borrowing terms included 18.7 year maturities, 6.4 year grace periods, and 1.4 percent interest rates. These terms are more favorable than the average terms that Chinese lenders extend to low- and middle-income countries for other types of activities.
These donations and concessional loans allow Chinese customs inspection equipment to be disseminated around the world—in competition with customs inspection equipment provided by other companies.
Nuctech’s dominance in scanner distribution
Nuctech Company Ltd. (同方威视技术股份有限公司) is one of the key companies involved in the provision of global inspection equipment, ranging from cargo and vehicle inspection to personnel screening. Its competitors include U.S.-based companies such as Rapiscan Systems, L3Harris Technologies, and Leidos, as well as European-based companies like Smiths Detection and Thales Group, among others.
Nuctech is a partially state-owned company that emerged from Tsinghua University in the 1990s. Its parent company is Tsinghua Tongfang (清华同方股份有限公司), a state-owned enterprise. China National Nuclear Corporation (中国核工业集团公司), an energy and defense conglomerate controlled by China’s State Council, is the controlling stakeholder of Tsinghua Tongfang and holds a 21 percent ownership stake in Nuctech. Nuctech is further connected to the state, as the company’s former chairman in the early 2000s now serves in the central government.
The company appears to be China’s preferred provider of customs inspection equipment for overseas facilities. It served as the provider of equipment in at least 52.8% (57 records) of Chinese grant- and loan-financed customs inspection activities. Although 50 other records did not capture an implementing agency, and only one identifies a different Chinese implementing agency, Nuctech is likely to have been the main equipment provider in most of these cases.
Out of the 108 customs inspection activities in low- and middle-income countries, only one company other than Nuctech emerged as providing this technology: Beijing Hualixing Technology Development Ltd. (北京华力兴科技发展有限责任公司). AidData has identified only one loan for custom scanners provided by Beijing Hualixing Technology Development Ltd. to Djibouti in 2002, highlighting Nuctech’s dominant position. While other Chinese competitors to Nuctech exist—such as Hikvision (state-owned) and Dahua Technologies (minority state-owned)—there are no public records of loans and grants to support the acquisition, installation, or use of equipment from Nuctech’s Chinese competitors for customs scanners. In addition to its provision of physical equipment, Nuctech often provides one year of training and technical assistance for customs authorities in recipient countries.
Nuctech has been at the forefront of multiple controversies over its customs inspection equipment. This culminated in the addition of Nuctech to the U.S. Entity List in December 2020, subjecting Nuctech to export control and licensing requirements for its “involvement in activities that are contrary to the national security interests of the United States” due to its “lower performing equipment [impairing] U.S. efforts to counter illicit international trafficking in nuclear and other radioactive materials.”
While the U.S. government has subjected Nuctech to export control restrictions, other countries are only slowly starting to follow suit. Earlier this year, the European Commission (EC) conducted raids on Nuctech’s Polish and Dutch offices. This has now evolved into an EC investigation due to “illegal state support,” which Nuctech has protested.
National security implications
Amid rising national security concerns, Nuctech—and the presence of Chinese scanner equipment in general—has spread beyond low- and middle-income countries to penetrate other markets as well. In October 2024, the Italian Customs and Monopolies’ Authority reportedly decided to award Nuctech two tenders worth millions of euros to provide equipment.
An investigation by the Associated Press also revealed that Nuctech customs scanners are in use in “26 of the 27 EU member states”—including in Estonia, Latvia, Lithuania, Poland, and Finland—and with “airports in London, Amsterdam, Brussels, Athens, Florence, Pisa, Venice, Zurich, Geneva and more than a dozen across Spain [all having signed] deals for Nuctech equipment.”
Nuctech’s addition to the Entity List in 2020, however, does not eliminate U.S. national security risks. U.S. cargo and citizens are still passing through thousands of customs checkpoints every day that employ Nuctech’s scanning equipment. This could allow for the capture of sensitive data, such as biomedical, cargo, and potential military transshipment information. According to the U.S. Maritime Administration, the data that Nuctech equipment accesses potentially “includes biometric information, personally identifiable information (PII), patterns of life and/or behavioral migrant patterns, cargo information, proprietary data, and geo-locational metadata.”
This raises concerns in countries that see high numbers of American visitors, as well as in countries that partner militarily with the United States. AidData has identified two financial commitments from China (one loan in 2007 and one grant in 2018) that supported the delivery of Nuctech customs scanners to 11 unique locations within the Philippines, a close security partner of the United States. Most recently, the Bureau of Customs at the Port of Subic reported receiving a new Nuctech X-ray machine model MT1213LT in November 2024.
These installations took place alongside U.S. Navy ships calling at commercial ports and free zones in the Philippines. For example, the USS Emory S. Land made a port visit to Subic Bay in November 2019, the USS Chung Hoon docked in Subic Bay in April 2023, and the USS Blue Ridge made a port call at the Port of Manila in June 2024. The Port of Manila and the Port of Subic Bay are among two of the 11 locations in the Philippines with Nuctech scanners. While sensitive equipment may undergo a different loading process than regular cargo, it remains unclear what cargo passes through these customs and security scanners.
Additionally, Nuctech has previously donated scanners for high-security events. In 2018, during the Asia-Pacific Economic Cooperation (APEC) Summit in Papua New Guinea, the Chinese government donated “three body and cargo scanners” for use in Port Moresby for the duration of the summit. According to the Associated Press, “Nuctech says it provided security equipment for the Olympics in Brazil in 2016, then-President Donald Trump’s visit to China in 2017, and the World Economic Forum in 2020,” as well as for “some U.N. organizations.”
Concerns over Nuctech equipment’s security, as well as the spread of its scanning equipment at sensitive customs locations and at high-security events internationally, highlight that further actions beyond the Entity List are likely needed.
China’s future in global customs inspection
As AidData collects information about China’s grant and loan commitments in 2023 and 2024 for an update to its current dataset, China’s global scanner distribution continues. In June 2023, CGTN Africa reported that China “donated two maritime control and surveillance equipment to Tunisia to improve security at the La Goulette port.” In October 2023, China donated more scanners to the Serbian Ministry of the Interior. In November 2023, the Chinese ambassador to Jamaica handed over “more than 100 sets of China-aided electronic office equipment and airport CT security scanners.” And most recently, in June 2024, Samoa received its first customs container X-ray scanner procured by Nuctech.
Although American agencies—such as the U.S. Embassies in Georgia and Panama—have made efforts to counter China’s scanner provision, these efforts have not matched China in scale, which may come at the cost of national security and data protection.
This analysis of scanners comes at a time of heightened U.S. c of ship-to-shore cranes employed at global seaports and cybersecurity concerns over the role of Chinese companies, such as the state-owned enterprise ZPMC and the Chinese-made logistics data platform Logink. Further action by the U.S. Congress and the government is needed to comprehensively strengthen critical domestic and overseas infrastructure and to combat these national security risks.
Methodology note
This analysis relies upon grant and loan commitments from 2000 to 2022, which are denominated in constant 2021 U.S. dollars. The data are drawn from AidData’s Global Chinese Development Finance Dataset, Version 3.0, which covers 2000-2021, as well as additional data collection for financial commitments in 2022.
