China Strongly Condemns US Blacklisting Dozens of Its Firms

China has condemned the US to add 33 Chinese entities to the trade blacklist, a move that risks potential reprisals from Beijing as tensions between the world's two largest economies deteriorate further.

On Saturday, the US Department of Commerce extended its list of so-called entities, which restricts access to American technology and other items, to include 24 Chinese companies and universities that it claimed had ties to the military and 9 other entities accused of human rights violations in Xinjiang.

China’s foreign ministry on Monday expressed “strong dissatisfaction” and “firm opposition” to the move as it defended the government’s crackdown in Xinjiang, saying that “counter-terrorism measures” were taken “to prevent the breeding of terrorism and extremism at the source.”

“We urge the United States to correct its mistakes, withdraw the relevant decisions, and stop interfering in China’s internal affairs,” foreign ministry spokesman Zhao Lijian told reporters. “China will continue to take all necessary measures to safeguard the legitimate rights and interests of Chinese enterprises and safeguard national sovereignty, security, and development interests.”

The partnership between the US and China has changed significantly over the last few months, partially because America was one of the countries hardest affected by the coronavirus pandemic that first broke out in the Chinese city of Wuhan. The two biggest economies in the world have disagreed on a variety of topics, including investment to Taiwan.

Some of the organizations affected issued statements opposing the blacklistings, while analysts warned of a further decoupling between the US and China.

“The move marks a US-China technology decoupling 2.0 or 2.5.,” said Zhou Xiaoming, a former Ministry of Commerce official and diplomat. “This won’t be the last one, and there will be more coming.”

Company Reactions

Qihoo 360 Technology Company Ltd., an Internet security software provider, said earlier in a statement that the US is moving politicized business. NetPosa Technologies., Ltd, which produces video recorders, said the sanctions would not have a major impact on its day-to-day operations, adding that it would continue to locate its supply chain.

China’s Foreign Minister Wang Yi on Sunday warned US politicians were pushing relations to a “new Cold War,” as American politicians condemned Beijing’s move to impose a national security law on Hong Kong.

“The message sent from the US is more important than the entity list itself,” said Li Yong, a senior fellow at the China Association of International Trade, which is connected to the Ministry of Commerce. “It shows the US intention to politicize commercial ties, curb China’s technology development, and expand its long-arm jurisdiction.”

Li said China has refrained from implementing its own “unreliable entity list” because it still wants to leave some “breathing space” for bilateral relations. China announced it was preparing the blacklist in mid-2019 at the height of the trade war with the US, but never said who was on the list.

Yet, earlier this month, when the US announced further cuts to Huawei Technologies Co Ltd., Hu Xijin, editor of the Global Times newspaper, tweeted that China would retaliate by using the list. And the paper cited a source close to the Chinese government as saying that US companies like Apple Inc and Qualcomm Inc could be targeted.

The recent move from the US may prompt China to take some “proportionate countermeasures,” said Zhou. The “unreliable entity list” could be one option and “retaliation could be taken as early as after the Two Sessions,” Zhou said, referring to the annual legislative meetings currently underway in Beijing and scheduled to end on May 28

Source: Bloomberg News