The administration of US President Donald Trump has ramped up the pressure on China ahead of high level trade talks with the Asian nation this week.
More Chinese firms have been added to the US Commerce Department’s ‘Entity List’, which bars US companies from supplying or trading with them.
Huawei is perhaps the most widely recognised Chinese firm currently on the Entity List, but now 20 Chinese public security bureaus and eight companies including video surveillance firm Hikvision, and facial recognition specialists SenseTime Group Ltd and Megvii Technology Ltd, have been added to the list.
The US said it made the move because of Chinese treatment of its Muslim minorities, and is not associated with the resumption of trade talks with China this week.
“Today, the Bureau of Industry and Security of the Department of Commerce announced that it will add 28 Chinese governmental and commercial organisations to the Entity List for engaging in or enabling activities contrary to the foreign policy interests of the United States,” announced the US Commerce Department.
“This action constricts the export of items subject to the Export Administration Regulations (EAR) to entities that have been implicated in human rights violations and abuses in China’s campaign targeting Uighurs and other predominantly Muslim ethnic minorities in the Xinjiang Uighur Autonomous Region (XUAR),” it added.
The US is clear that unlike Huawei, which it has blacklisted due to national security concerns, these other firms have joined the list because of alleged human rights abuses in China.
“The US Government and Department of Commerce cannot and will not tolerate the brutal suppression of ethnic minorities within China,” said Secretary of Commerce Wilbur Ross. “This action will ensure that our technologies, fostered in an environment of individual liberty and free enterprise, are not used to repress defenseless minority populations.”
The US allege that all these firms “have all been implicated in the implementation of China’s campaign of repression, mass arbitrary detention, and high-technology surveillance.”
China in response has slammed the United States and said it should stop interfering in its affairs.
China will continue to take firm and resolute measures to protect its sovereign security, foreign ministry spokesman Geng Shuang was quoted by Reuters as telling a regular media briefing without elaborating.
Firms now on the US blacklist include Hikvision, which has a market value of about $42 billion, and claims to be the world’s largest maker of video surveillance gear.
SenseTime, valued at around $4.5 billion according to Reuters, is one of the world’s most valuable AI firms.
Another firm, Megvii is valued at around $4 billion and is preparing an IPO to raise at least $500 million in Hong Kong.
According to Reuters, the other companies on the list are speech recognition firm iFlytek Co, surveillance equipment maker Zhejiang Dahua Technology, data recovery firm Xiamen Meiya Pico Information Co, facial recognition firm Yitu Technology and Yixin Science and Technology Co.
Placement on the Entity List creates a supply chain problem for these firms, as they cannot source or purchase technology such as silicon from any US firms.
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