More Chinese firms added to US trade blacklist

More Chinese firms added to US trade blacklist

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More Chinese firms added to US trade blacklist

The action will restrict exports to firms that support Chinese military's modernisation efforts, US government says

The US government has added even more Chinese firms to its export blacklist, citing national security and foreign policy concerns.

The US Commerce Department added eight tech firms based in China to the 'Entity List' for their alleged role in assisting the Chinese military's quantum computing efforts, such as counter-stealth and counter-submarine applications, and the ability to break encryption or develop unbreakable encryption.

The firms blacklisted either acquired or attempted to acquire US-origin items to support military applications, officials said.

Among these entities are Hangzhou Zhongke Microelectronics Co Ltd, New H3C Semiconductor Technologies Co Ltd, Hunan Goke Microelectronics, Xi'an Aerospace Huaxun Technology and Yunchip Microelectronics, according to Reuters.

The Commercec Department said action against these firms would restrict exports to PRC producers of electronics that support the Chinese military's modernisation efforts.

In all, the Department added 27 new entities or individuals from China, Pakistan, Singapore and Japan to the List.

Sixteen entities or individuals operating in China and Pakistan were added for their involvement in Islamabad's nuclear and ballistic missile programme.

Separately, the Department added the Moscow Institute of Physics and Technology to the Military End-User (MEU) list, for producing equipment for a military end-user.

Potential suppliers to these sanctioned firms will now need to apply for a licence from the government before they can sell products or technology to them.

"Global trade and commerce should support peace, prosperity and good-paying jobs, not national security risks," US Secretary of Commerce Gina Raimondo said in a statement.

"Today's actions will help prevent the diversion of U.S. technologies to the PRC's and Russia's military advancement and activities of non-proliferation concern like Pakistan's unsafeguarded nuclear activities or ballistic missile program."

"Down the wrong path"

Liu Pengyu, spokesperson for China's embassy in Washington, criticised the US government's move and said China was "firmly opposed" to such measures.

He added that the US should "follow the spirit" of a virtual meeting between President Joe Biden and Chinese leader Xi Jinping last week, and "meet China halfway instead of going further down the wrong path."

US officials have long complained that Chinese firms aid the Chinese government's efforts to collect sensitive information on people and organisations in Western countries.

In May 2019, the US Commerce Department put Chinese equipment maker Huawei on the Entity List, barring the company from doing any business with US firms without getting a special licence from the US government.

The government added 38 Huawei affiliates to its list of companies considered to pose threats to the national security in August last year, increasing the total number of such companies to 152.

In September 2020, the Trump administration told American chip makers that they had to obtain individual licenses before selling certain technology to Semiconductor Manufacturing International Corporation (SMIC) - the largest silicon chip maker in China.

The move came after US defence contractor SOS International said in a report that SMIC researchers were using American equipment to develop new technologies for the Chinese military.

Last October, a report by the UK's House of Commons' Defence Committee claimed there was clear evidence of collusion between Huawei and the Chinese government. The Committee recommended the UK government consider removing all Huawei equipment from its 5G communication networks earlier than planned.

Huawei rejected the report's findings, saying it lacked credibility.