US puts Chinese firms helping military on trade blacklist

WASHINGTON – The US government put a dozen Chinese companies on its trade blacklist on Wednesday (Nov 24) over national security and foreign policy concerns, citing in some cases their help developing the Chinese military’s quantum computing efforts.

The Commerce Department said several entities and individuals from China and Pakistan were also added to its Entity List for contributing to Pakistan’s nuclear activities or ballistic missile programme.

The latest US action on Chinese companies comes amid growing tensions between Beijing and Washington over the status of Taiwan and trade issues.

In total, 27 new entities from China, Japan, Pakistan and Singapore were added to the list.

Commerce Secretary Gina Raimondo said in a statement that the new listings will help prevent US technology from being used to support the development of Chinese and Russian “military advancement and activities of non-proliferation concern, like Pakistan’s unsafeguarded nuclear activities or ballistic missile programme”.

The Chinese Embassy in Washington charged that the United States uses the catch-all concept of national security and abuses state power to suppress and restrict Chinese enterprises using all possible means.

“China is firmly opposed to that,” embassy spokesman Liu Pengyu said.

He said the US should “follow the spirit” of a virtual meeting between US President Joe Biden and Chinese leader Xi Jinping last week and “meet China halfway instead of going further down the wrong path”.

The Commerce Department said Hangzhou Zhongke Microelectronics, Hunan Goke Microelectronics, New H3C Semiconductor Technologies, Xi’an Aerospace Huaxun Technology and Yunchip Microelectronics were placed on the Commerce Department’s entity list for their “support of the military modernisation of the People’s Liberation Army”.

It also added Hefei National Laboratory for Physical Sciences at Microscale, QuantumCTek and Shanghai QuantumCTeck to the list for “acquiring and attempting to acquire US-origin items in support of military applications”.

The eight Chinese firms were listed to prevent US technology from being used to help China develop quantum computing applications for its military.

The Commerce Department wants to stop the Chinese military from developing its counter-stealth technology, which could include equipment like advanced radars, and counter-submarine applications such as undersea sensors.

The action also blocks US material from being used to help China break encryption or develop unbreakable encryption, the department said.

Suppliers to companies on the entity list will need to apply for a licence before they can sell to them, which is likely to be denied.

Separately, the Moscow Institute of Physics and Technology was added to the Commerce Department’s military end-user list, but the listing did not provide additional information other than it had produced military products.

The entity list has increasingly been used for national security and foreign policy aims since the Donald Trump was in place.

Chinese telecom company Huawei was added in 2019, cutting it off from some key suppliers and making it difficult for them to produce mobile handsets.

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