US President Donald Trump’s administration is poised to add China’s top chipmaker, Semiconductor Manufacturing International Corp (SMIC, 中芯國際), and national offshore oil and gas producer China National Offshore Oil Corp (CNOOC, 中國海洋石油) to a blacklist of alleged Chinese military companies, according to a document and sources, curbing their access to US investors and escalating tensions with Beijing weeks before president-elect Joe Biden takes office.
Reuters last month reported that the US Department of Defense (DOD) was planning to designate four more Chinese companies as owned or controlled by the Chinese military to the list, bringing the number of Chinese companies affected to 35.
A recent executive order issued by Trump would prevent US investors from buying securities of the listed firms starting late next year.
It was not immediately clear when the new tranche, would be published in the Federal Register, but the list comprises China Construction Technology Co (中國建築技術公司) and China International Engineering Consulting Corp (中國國際工程諮詢公司), in addition to SMIC and CNOOC, according to the document and three sources.
SMIC said it continued “to engage constructively and openly with the US government” and that its products and services were solely for civilian and commercial use.
“The company has no relationship with the Chinese military and does not manufacture for any military end-users or end-uses,” it said.
CNOOC’s listed unit said in a stock market statement that it had inquired with its parent and learned that it had not received any formal notice from US authorities.
Chinese Ministry of Foreign Affairs spokeswoman Hua Chunying (華春瑩) said, in response to a question about Washington’s planned move, that China hoped the US would not erect barriers and obstacles to cooperation and discriminate against Chinese companies.
The upcoming move, coupled with similar policies, is seen as seeking to cement Trump’s tough-on-China legacy and to box Biden into hardline positions on Beijing amid bipartisan anti-China sentiment in Congress.
The Biden campaign declined to comment.
Reuters reported last week that the Trump administration is close to declaring that 89 Chinese aerospace firms and other companies have military ties, restricting them from buying a range of US goods and technology.
The list of “Communist Chinese Military Companies” was mandated by a 1999 law requiring the Pentagon to compile a catalog of companies “owned or controlled” by China’s People’s Liberation Army, but DOD only complied this year.
Meanwhile, Hua said that China would impose sanctions on four people with links to US democracy promotion efforts over interference in Hong Kong: John Knaus, senior director of the National Endowment for Democracy; Manpreet Anand, a regional director of the National Democratic Institute (NDI); Kelvin Sit, the NDI’s program director for Hong Kong; and Crystal Rosario, a specialist at the NDI.
As of yesterday, the four were banned from entering China, she said.
“The US behavior blatantly interferes in Hong Kong affairs and grossly interferes in China’s domestic affairs,” Hua said. “It violates basic norms governing international relations, and China firmly rejects and condemns this.”
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