US Adds More Chinese Firms To Trade Blacklist

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Trade war between the world’s two biggest economies worsens, as the United States adds more Chinese firms to its Entity List

The United States continues its trade clampdown against Chinese firms, over national security concerns.

The US Commerce Department announced it is “adding twenty-seven foreign entities and individuals to the Entity List for engaging in activities that are contrary to the national security or foreign policy interests of the United States.”

The vast bulk of these 27 firms are from China, but there are also firms from Japan, Pakistan, and Singapore included, as well as one entity based in Russia, which has been added to the Military End-User (MEU) list.

Quantum computing

The US has been steadily expanding its clampdown on Chinese firms.

In October for example, 28 Chinese firms were added to the US Commerce Department’s ‘Entity List’.

Huawei is perhaps the most widely recognised Chinese firm currently on the Entity List, but the October clampdown saw 20 Chinese public security bureaus and eight companies including video surveillance firm Hikvision, and facial recognition specialists SenseTime Group Ltd and Megvii Technology Ltd, being added to the list.

And now this week the US has added another 27 (mostly Chinese) entities to its trade blacklist – a decision that was explained by US Secretary of Commerce Gina M. Raimondo.

The main reason for this week’s additions, are that a large number of the Chinese firms that have banned were involved in either supplying quantum computing, services to the Chinese military.

Others are suppliers of tech for Pakistan’s nuclear activities.

National security

“Global trade and commerce should support peace, prosperity, and good-paying jobs, not national security risks,” said Raimondo. “Today’s actions will help prevent the diversion of US 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.”

“The Department of Commerce is committed to effectively using export controls to protect our national security,” added Raimondo.

The Commerce Department said eight technology entities are based in China, and they are being added to the Entity List in order to stop American emerging technologies from being used for China’s quantum computing efforts that support military applications, such as counter-stealth and counter-submarine applications, and the ability to break encryption or develop unbreakable encryption.

The US Commerce Department said these China-based technology entities support the military modernisation of the People’s Liberation Army, and are attempting to acquire US origin-items in support of military applications.

“Today’s action will also restrict exports to PRC producers of electronics that the support the People’s Liberation Army’s military modernisation efforts,” said the department.

Pakistan nuclear program

Meanwhile another 16 entities and individuals operating in China and Pakistan have also been added to the Entity List “based on their contributions to Pakistan’s unsafeguarded nuclear activities or ballistic missile program.”

And the department said that this week three affiliates of Corad Technology Limited, which is a Chinese entity that was already added to the Entity List in 2019, are now on the Entity List due to their involvement in sales of technology from the West to Iran’s military and space programs, Democratic People’s Republic of Korea (North Korea) front companies, and Chinese government and defense industry subordinate entities.

Separately, the Moscow Institute of Physics and Technology has been added to the MEU List on the basis of its production of military products for a military end-user.

The MEU list is designed to halt assistance to military end users in China, Russia, Venezuela and Burma.

President Joe Biden and his counterpart, Chinese President Xi Jinping recently held a virtual summit, but the two parties did not reach any breakthroughs to resolve trade tensions.

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Author: Tom Jowitt
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