It is part of President Donald Trump’s (remember him) scorched earth policy after losing his re-election bid 3 November. Political analysts have said Trump was likely to take further action before President-elect Joe Biden takes office 20 January.
The Pentagon added four companies including Semiconductor Manufacturing International to a list of entities deemed to be part of efforts to modernise the ruling Communist Party’s military wing, the People’s Liberation Army. That raises the total number of companies on the blacklist to 35.
The Chinese foreign ministry accused Washington of abusing national security arguments to handicap fledgling Chinese industrial competitors.
Ministry spokeswoman, Hua Chunying said the US actions seriously violate the principle of market competition and the rules of international trade and economy that the US side has always advocated.
“The US side should stop abusing state power or generalizing the concept of national security to suppress foreign enterprises.”
SMIC plays a leading role in the ruling party’s effort to reduce reliance on US and other foreign technology by creating Chinese suppliers of processor chips and other components.
That has taken on greater urgency after Washington blocked access to American chips and other technology for telecom equipment giant Huawei and imposed curbs on other Chinese buyers. The White House also has blocked the use of US technology by global vendors to produce chips for Huawei.
Political analysts expect little change in policy under Biden due to widespread frustration with China’s trade and human rights records and accusations of spying and technology theft. However, there is some concern that any further moves against China will harm US business in the long term. If China is forced to develop its own technology it will no longer need US companies and will be churning out chips much faster.
The Pentagon’s first list of 20 companies deemed to be PLA-linked in June included Huawei and video surveillance provider HikVision Digital Technology. Both say they never have taken part in military-related research.
Also cited by the Pentagon in earlier lists are state owned phone carriers China Telecom and China Unicom and petrochemical, construction, aerospace, rocketry, shipbuilding and nuclear power equipment companies.
