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China's SMIC And CNOOC To Be Added To Defense Blacklist By Trump Administration: Reuters


11/30/2020


China's SMIC And CNOOC To Be Added To Defense Blacklist By Trump Administration: Reuters
A blacklist comprising of alleged Chinese military companies will soon have China’s top chipmaker SMIC and national offshore oil and gas producer CNOOC, claimed a report published by the news agency Reuters. 
 
The administration of the United States president Donald Trump is poised to make the additions which will reduce the access of the companies to investors in the US while also escalating tensions with China weeks before President-elect Joe Biden is set to take office, said the report quoting a document and sources.
 
According to reports in the media published earlier this month, four more Chinese companies would be designated by the US Department of Defense (DOD) as being owned or controlled by the Chinese military. Such as designation would bring the number of such Chinese companies to be impacted by the move to 35, US investors would be prevented from purchasing securities of the firms listed in the blacklist starting late next year according to a recent executive order issued by President Donald Trump.
 
When the new list would be published in the Federal Register was not immediately clear, said the Reuters’ report. It has been reported that the list includes China Construction Technology Co Ltd and China International Engineering Consulting Corp, as well as Semiconductor Manufacturing International Corp (SMIC) and China National Offshore Oil Corp (CNOOC), according to the document and three sources, the report claimed.
 
It continued “to engage constructively and openly with the U.S. government” SMIC said and added that the products and services offered by it were only available for civilian and commercial usage. “The Company has no relationship with the Chinese military and does not manufacture for any military end-users or end-uses.”
 
After an inquiry with its parent company, the company has come to know that no  formal notice from relevant US authorities had been received by it, said CNOOC’s listed unit CNOOC Ltd.
 
China hoped that the United States would not bring up new barriers and obstacles that stall cooperation and are discriminatory against Chinese companies, said China’s foreign ministry spokeswoman Hua Chunying responding to a question about US’s planned move.
 
No comments on the issue were available from the US DOD and the Chinese embassy in Washington in the Reuters report.
 
With a heavy dependency on suppliers from the US for equipment, SMIC was already in the line of fire of the US administration. Some companies were told by the US Commerce Department in September that special license needs to be obtained by them prior to selling their products or services to SMIC after the department became sure of an “unacceptable risk” posed by the equipment that is supplied to the Chinese firm could end up in the hands of the Chinese military and used for military purposes. 
 
According to analysts, the latest move by the Trump administration as well as other previous similar measures is an effort by Trump to portray himself permanently as a tough-on-China President and to ensure that  incoming Democrat Biden gets a hardline position on China.
 
(Source:www.reuters.com)


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