The Trump administration is reportedly preparing to add more Chinese businesses to its blacklist of companies it says have ties to the Chinese military.
According to documents obtained by Reuters, China’s top chipmaker, SMIC, and national offshore oil and gas producer CNOOC will be added to the list for allegedly being controlled by China’s military. China Construction Technology Co. Ltd. and China International Engineering Consulting Corp. will also be added to the list. This action will limit their access to U.S. investors.
SMIC said in a statement that its products were only meant for civilian and commercial use.
“The Company has no relationship with the Chinese military and does not manufacture for any military end-users or end-uses,” said SMIC.
Both SMIC and CNOOC saw their share values drop once news broke of their possible targeting by the U.S. government.
Reuters noted in its report that SMIC heavily depends on equipment from U.S. suppliers. In September companies were informed by the U.S. Commerce Department that they would need to acquire a license before selling goods or services to SMIC due to “unacceptable risk” that they would be used for military purposes.
This is the most recent in a string of actions by the Trump administration that has escalated tensions with China. Trump has repeatedly made baseless claims that the coronavirus pandemic originated from a lab in China and has sought to pin the blame for the pandemic on the country.
Experts say the orders will likely make little impact due to their limited effect and the uncertainty of the upcoming administration under President-elect Joe Biden, who has indicated he will be more open to the international community. However, they say this move will still serve to widen the growing divide between China and the U.S.