US blacklists two more Chinese companies, a move that strains bilateral ties: experts

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The US Department of Commerce (USDC) published an addition to the US Entity List on Tuesday, with more companies being added to the list, including two Chinese companies and another four companies from South Africa, the United Arab Emirates and the UK. Experts noted that this move, under the guise of “national security,” aims to target China’s tech industries, and will further strain China-US relations.

 

Adding these companies is designed to prevent entities that threaten US’ national security and foreign policy interests from accessing items subject to the Export Administration Regulations, according to the USDC.

 

Two Hong Kong-based companies, Global Training Solutions Limited and Smartech Future Limited, were added to the US trade Entity List, due to their reported connections with the training of China’s military forces using Western and NATO sources, Reuters reported.

 

“These targeted measures are crucial to prevent these entities from exploiting our most cutting-edge technologies against our national security interests,” said Alan Estevez, under secretary for the Bureau of Industry and Security within the USDC, in a press release on Tuesday.

 

Chinese experts have criticized US’ unreasonable suppression of Chinese companies. The citing of national security is just a pretext to maintain the US’ technological hegemony through technology wars and decoupling, Li Yong, a senior research fellow at the China Association of International Trade, told the Global Times on Wednesday.

 

It’s not surprising as these moves are a part of US government’s intensifying efforts to crack down on China in the field of science and technology, and decouple from China, Li said.

 

In recent years, the US is continuing its economic coercion against Chinese industries and businesses with claims such as protecting national security, or “overcapacity,” Song Guoyou, a deputy director of the Center for American Studies, Fudan University, told the Global Times on Wednesday.

 

“This move will seriously undermine China-US ties, which are crucial for global stability and prosperity,” Song said, adding that the rise of unilateralism and protectionism is the main barrier hindering the normalization of bilateral relations of the two countries.

 

However, it is unrealistic for Washington to contain China’s technological advancements by banning the export of US technology and restricting Chinese outbound investment, according to Chinese experts.

 

Given the rising number of Chinese companies and individuals engaging in overseas investment and development, they are increasingly being targeted by Western politicians and foreign intelligence agencies. However, experts believe that the impact on China would be limited, because Chinese tech companies have a strong competitive edge and immeasurable potential in the global tech landscape, the experts added.

 

“Chinese companies may find it challenging to navigate in such an unpredictable environment, but they can explore legal avenues to seek exclusion from such irrational practices,” Li said.

 

To date, the USDC has placed more than 600 Chinese organizations and companies and individuals on the Entity List, covering artificial intelligence, computing, drones and other sectors, with the intention of restricting and banning their access to US technologies.

 

In response, the Ministry of Commerce (MOFCOM) of China said on May 10, that China opposes the abuse of export control tools, including the entity list, to crack down on Chinese companies.

 

“For a long time, the US side has generalized the concept of national security and abused export control measures to suppress the development of enterprises from other countries. Those actions have seriously harmed the legitimate rights and interests of enterprises, undermined the security and stability of global industrial and supply chains, and hindered the recovery and development of the world economy,” MOFCOM said.

 

Chinese Foreign Ministry spokesperson Lin Jian, also urged the US to stop overstretching the concept of national security, stop politicizing trade and tech issues or using them as weapons and stop abusing various types of sanctions lists to suppress Chinese companies. China will continue to do whatever is necessary to defend the lawful rights and interests of Chinese companies, Lin said.

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