Trump to include China's SMIC and CNOOC to defence blacklist: Sources

The Trump administration is poised to add China's top chipmaker SMIC and national offshore coal and oil producer CNOOC to a blacklist of alleged Chinese armed service companies, according to a record and sources, curbing their usage of US investors and escalating tensions with Beijing weeks before President-elect Joe Biden takes office.

Reuters reported earlier this month that the Section of Defense was likely to designate four even more Chinese companies seeing that owned or manipulated by the Chinese army, bringing the amount of Chinese companies damaged to 35.

It had been not immediately sharp when the brand new tranche will be published in the Federal Register. However the list comprises China Construction Technology and China International Engineering Consulting Corp, furthermore to Semiconductor Making International Corp (SMIC) and China National Offshore Oil Corp (CNOOC), in line with the document and three sources.

The Defense Department did not respond to a request for comment.

The move, in conjunction with similar policies, sometimes appears as wanting to cement outgoing Republican President Donald Trump's tough-on-China legacy and also to box incoming Democrat Biden into hardline positions on Beijing amid bipartisan anti-China sentiment in Congress.

The list can be part of a broader effort by Washington to target what it sees as Beijing's efforts to enlist corporations to harness emerging civilian technologies for military purposes.

Reuters reported the other day that the Trump administration is near to declaring that 89 Chinese aerospace and other companies have military ties, restricting them from buying a selection of US goods and technology.

SMIC was already in Washington's crosshairs. In September, the US Commerce Department imposed constraints on exports to the business after concluding there was an "unacceptable risk" that products supplied to it may be employed for military purposes.

The set of "Communist Chinese Army Companies" was mandated by a 1999 rules requiring the Pentagon to compile a catalogue of companies "owned or controlled" by the People's Liberation Army, but the Defense Department only complied in 2020. Giants like Hikvision, China Telecom and China Mobile were added before this year.

This month, the White House published an executive order, first reported by Reuters, that sought to provide teeth to the list by prohibiting US investors from buying securities of the blacklisted companies from November 2021.

The directive is unlikely to deal the firms a serious blow, experts said, due to its limited scope, uncertainty about the stance of the Biden administration and already-scant holdings by US funds.

Still, combined with different measures, it deepens a rift around Washington and Beijing, previously at loggerheads more than the coronavirus and China's crackdown on Hong Kong.

Congress and the administration have got sought increasingly to curb the US market gain access to of Chinese businesses that do not adhere to rules faced by American rivals, even if which means antagonising Wall Street.