US adds China SMIC to an economic blacklist

Photo: EPA Wilbur Ross

US decided to add dozens of Chinese companies ncluding the country’s top chipmaker SMIC, to a blacklist related to trade relations, Commerce Secretary Wilbur Ross said in a broadcast interview quoted by Reuters.

In addition to the blacklist the department confirmed it was also including 11 affiliates of SMIC, Ross said. The drastic action, which was not previously noted, is seen as a further effort to bolster anti-China legacy. The Commerce Department is expected to exted further the blacklist by adding 80 additional companies and affiliates, nearly all of them Chinese.

China’s foreign ministry complained in a statement that if true, the blacklisting would be evidence of US oppression of Chinese companies and that Beijing would continue to take “necessary measures” to protect their rights. “We urge the U.S. to cease its mistaken behavior of unwarranted oppression of foreign companies,” ministry spokesman Wang Wenbin told a regular news conference in Beijing.

The designations by the Commerce Department are expected to name some Chinese companies that Washington says have ties to the Chinese military, including some helping it construct and militarize artificial islands in the South China Sea, as well as some involved in alleged human rights violations, the sources said.

Last month, the Defense Department added the SMIC to a blacklist of alleged Chinese military companies, effectively banning US investors from buying its shares starting late next year. SMIC has repeatedly said that it has no relationship with the Chinese military.

SMIC is the largest Chinese chip manufacturer but trails Taiwan Semiconductor Manufacturing Co, the industry’s market leader. It has sought to build out foundries for the manufacture of computer chips that can compete with TSMC. Ties between Washington and Beijing have grown increasingly antagonistic over the past year as the world’s top two economies sparred over Beijing’s handling of the coronavirus outbreak, imposition of a national security law in Hong Kong and rising tensions in the South China Sea.

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