U.S. blacklists list dozens of Chinese companies including SMIC, DJI

Washington- The United States added dozens of Chinese companies, including the country’s leading chip maker SMIC and Chinese drone maker SZ DJI Technology Co. Ltd, to a trade blacklist on Friday as the U.S. President’s administration Donald Trump confirms tensions with China in his final weeks in office.

Reuters first reported that SMIC and other companies were added earlier on Friday. The move is seen as the latest in Trump’s Republican efforts to burn his hard-on-China image as part of a lengthy fight between Washington and Beijing over trade and a number of economic issues.

The U.S. Department of Commerce said the action against SMIC stems from Beijing’s attempts to exploit civilian technologies for military purposes and evidence of activity between SMIC and Chinese industrial weapons companies.

The Department of Commerce will not allow “advanced U.S. technology to help build an ever-increasing number of bell-ridden enemy weapons,” Secretary Wilbur Ross said in a statement.

The division also said it was adding the world’s largest drone company to the list along with AGCU Scientech; China’s National Scientific Instruments and Materials, and the Kuang-Chi Group for their assertion that they enable “large-scale human rights abuses.”

“The United States will use all available antidotes, including actions to prevent (Chinese) companies and establishments from exploiting U.S. goods and technologies for malignant purposes. , “Secretary of State Mike Pompeo put in a separate release.

SMIC and the other companies did not immediately comment.

But some lawyers, business officials and former officials raised questions about the impact of Friday’s move against SMIC. In general, entity registered companies must apply for permits from the Department of Commerce which is subject to strict scrutiny when seeking permission to obtain items from U.S. suppliers.

But SMIC will only go against a strict review rate when it seeks licenses for U.S. advanced chip-making equipment at 10 nanometers or lower. Permits for everything else sent to the company will be reviewed on a case-by-case basis, the Commerce Department said.

“It’s a nice (public relations) line: ‘We’re putting him on this bad guys list,’ ‘said William Reinsch, a former Commerce Department official, who said he thinks the group is already banning loads of such technology to SMIC. “As a practical thing … it doesn’t change anything.”

Republican spokesman Michael McCaul, a ranking member of the House Foreign Affairs committee, echoed Reinsch’s comments, saying he feared the rules were more “bark than a bite.” “I am concerned that it weakens the intent, and may create an exception for malignant actors to control U.S. exports,” he said in a statement.

‘SOLAR ARBITRARY’

But Chinese authorities did not mince words about Washington’s latest gambit.

In a speech to the Asian Association on Friday, China’s State Councilor Wang Yi, who is also the country’s foreign minister, noted the growing list of U.S. sanctions and called on Washington to stop imposed the “tribal ban” of Chinese companies.

China’s foreign ministry said that, if true, the blacklist would be evidence of U.S. violence on Chinese companies and that Beijing would continue to take “necessary steps” to protect its rights.

“We urge the U.S. to stop its deceptive behavior of pointless harassment of foreign companies,” ministry spokesman Wang Wenbin said at a regular press conference in Beijing on Friday.

The Commerce Department released a list of 77 companies and affiliates to the so-called entity list, including 60 Chinese companies.

The designations by the Department of Commerce include some organizations in China that claim to enable human rights abuses and some that help it build and arm artificial islands in China. South China Sea, the group said.

He also said organizations that obtained goods of U.S. origin to support the Chinese military and those involved in stealing U.S. trade secrets.

Companies previously added to the list include telecommunications equipment giants Huawei Technologies Co and 150 affiliates, and ZTE Corp. on sanctions breaches, as well as surveillance camera maker Hikvision about the abolition of Uighur minority in China.

FRAYING TEACHING

Shares in SMIC, formally Semiconductor Manufacturing International Corp., fell 5.2% in Hong Kong on Friday, while the company’s listed shares in Shanghai declined 1.8%. Indices in both markets were down less than 1%.

SMIC had already been in Washington crosshairs.

In September, the Commerce Department ordered suppliers of special equipment to the company to apply for export licenses after it was determined that there was an “undue risk” that equipment that had been give it to be used for military purposes.

Last month, the company’s Department of Defense added a separate blacklist of accused Chinese arms companies, effectively banning U.S. investors from buying their shares starting late in the year. next year.

SMIC has reiterated that it has no affiliation with the Chinese military.

SMIC is the largest Chinese chip manufacturer but it follows Taiwan Semiconductor Manufacturing Co., the industry’s market leader. He has tried to build furnaces to make computer chips that will be able to compete with those at TSMC.

Ties between Washington and Beijing have become increasingly unnatural over the past year as the world’s two major economies spurred as Beijing handled the coronavirus revolution, enforcement of national security law in Hong Kong and rising tensions in the South China Sea.