Daily Management Review

Four More Chinese Firms To Blacklist Defence Department To Be Added By Trump Administration: Reports


According to a report published by the news agency Reuters, four more Chinese companies are set to be designated by the United States as being supported by the Chinese military. The report quoting sources claimed that Washington was set to cut down the access of those companies to US investors.
According to analysts, this move by the US president Donald Trump us his attempt to cement his legacy of China opposition even while he is scheduled to vacate his office in January.
According to the report, the Department of Defense could release the designations by this week while those may be unveiled next week.
There were no comments in the report from the White House and the Chinese embassy in Washington.
The total the number of Chinese companies affected by the ban will reach 35 with these additions. The companies already under US sanctions include Chinese giants such as Hikvision, China Telecom Corp and China Mobile, which were added earlier this year.
A 1999 law requiring the Pentagon to compile a catalogue of companies “owned or controlled” by the People’s Liberation Army was used for preparing the list of banned “Communist Chinese Military Companies”.
Prior to this development, an executive order was issued by the White House which sought to grant more powers to this list by preventing American investors from purchasing securities of the blacklisted companies starting November 2021.
The move “helps ensure no American is unwittingly subsidizing the (Chinese Communist Party)’s campaign to dominate the technologies of the future,” said Republican Congressman Mike Gallagher, who has introduced legislation to ban blacklisted Chinese companies from US capital markets.
Experts however say that the firms were unlikely to face any serious impact because of the executive order due to the limited scope of the order as well as uncertainty about the position on the issue that would be adopted by the incoming Biden administration and already reduced holdings by US funds in the Chinese companies.
No details of his China strategy has been provided by the Democratic President-elect Joe Biden, set to assumed office on January 20. However if indications are to be accounted for, it is likely that Biden will continue with the tough approach to China as had been propounded by Trump.
It is also likely that the tensions between the two largest economies of the world will increase with the growing defense department list. The two countries have been at loggerheads over a host of issues including the coronavirus pandemic and the crackdown on Hong Kong by China.
After concluding there was an “unacceptable risk” that any equipment supplied to China’s biggest chip maker SMIC could be used for military purposes by the Chinese army, restrictions on exports to SMIC were imposed by the US Commerce Department in September.