Trump administration to add four more Chinese companies to Pentagon blacklist: sources

© Reuters. FILE PHOTO: Chinese and US flags fly near Bund in Shanghai

By Alexandra Alper and Mike Stone

WASHINGTON (Reuters) – Washington is set to nominate four more Chinese companies backed by the Chinese military, sources said, limiting their access to U.S. investors as the Trump administration seeks to solidify its bellicose legacy in China in its last days.

The designations, which have not been reported previously, could be released by the Defense Department as early as Friday, but could be released next week, said a US official and person familiar with the matter who declined to be named. .

The White House and the Chinese Embassy in Washington did not immediately respond to requests for comment.

These additions would bring the number of Chinese companies affected to 35, including giants like Hikvision (SZ 🙂 China Telecom Corp (HK 🙂 and China Mobile (HK :), which were added earlier this year.

The list of “Communist Chinese Military Enterprises” was mandated by a 1999 law requiring the Pentagon to compile a catalog of enterprises “owned or controlled” by the People’s Liberation Army, but the Defense Department did not comply. than this year.

The latest move would come just days after the White House issued an executive order, first reported by Reuters, that aimed to give the list some bite by banning U.S. investors from buying securities of companies on the blacklist from November 2021.

The move “helps ensure that no American unintentionally subsidizes the (Chinese Communist Party’s) campaign to dominate the technologies of the future,” said Republican Congressman Mike Gallagher, who introduced legislation banning Chinese companies listed on the the blacklist of US financial markets.

However, the executive order is unlikely to deal a serious blow to businesses, experts said, due to its limited reach, uncertainty over the position of the new Biden administration and the already limited holdings of U.S. funds.

Democratic President-elect Joe Biden, who takes office on Jan.20, has not laid out a detailed strategy for China, but all indications are that he will pursue a tough approach towards Beijing.

The Defense Ministry’s growing list will likely add to tensions between the world’s two largest economies, which have been at odds with the coronavirus and China’s crackdown on Hong Kong.

The list is also part of a larger effort by Washington to target what it sees as Beijing’s efforts to enlist companies to exploit emerging civilian technologies for military purposes.

In September, the US Department of Commerce imposed restrictions on exports to China’s largest chipmaker, SMIC, after concluding that there was an “unacceptable risk” that the equipment supplied to it could be used. for military purposes.

Congress and administration have increasingly sought to restrict access to the U.S. market for Chinese companies that do not comply with the rules facing their U.S. rivals, even if that means opposing Wall Street.

In August, officials from the Securities and Exchange Commission and the United States Treasury urged Trump to deregister Chinese companies that trade on U.S. exchanges and fail to meet his audit requirements by January 2022.

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