United States Adds China’s SMIC and CNOOC to Defense Black List


WASHINGTON (Reuters) – The Trump administration on Thursday added China’s top chipmaker, SMIC and oil giant CNOOC to a blacklist of alleged Chinese military companies, taking over from Beijing condemning President Biden Wes for the presidential election Attracted to eclipse.

FILE PHOTO: A logo of the Semiconductor Manufacturing International Corporation (SMIC) has been seen at the China International Semiconductor Expo (IC China 2020). REUTERS / Aly song / file photo

The Department of Defense designated a total of four additional companies owned or controlled by the Chinese military, including China Construction Technology Company Limited and China International Engineering Company Retail.

First reported by Reuters on Sunday, the total number of blacklisted companies is 35. While no penalties were initially imposed on the list, Republican President Donald Trump’s recent executive order would prevent American investors from buying the firms’ securities from the end of next year.

In Beijing, a State Department spokesman said China opposed American efforts to suppress its companies, adding that Washington’s steps run counter to principles of market competition.

“America should stop abusing national power and national security concepts to suppress foreign companies,” Hua Chunying told a regular news on Friday.

In a stock market statement, SMIC said it strongly opposed the decision, reflecting a fundamental misunderstanding of the end-use of its business and technology by the US administration.

The company also stated that there was no major impact from its addition to the list. Its Hong Kong shares closed down 5.4% after resuming in the afternoon following suspension on Friday.

CNOOC Ltd, the listed arm of China National Offshore Oil Corp (CNOOC), said in an exchange filing that it was assessing the impact of the situation on the group and would closely monitor the relevant follow-on developments.

CNOOC Ltd shares were down nearly 14% after Sunday’s report, and fell to 3.9% near Friday’s market.

SMIC, which relies heavily on equipment from American suppliers, was already in Washington’s crosshairs.

In September, the US Department of Commerce informed some firms that they were required to obtain a license before supplying goods and services to SMIC, after the conclusion of which there was an “unacceptable risk” that the equipment supplying it would be used for military purposes. Could be used for.

The expanded black list is seen as part of a bid to bolster Trump’s tough-on-China heritage and box Biden, the Democratic presidential-election that bipartisan anti-China sentiment at Congress in Beijing on January 20 Takes over positions of hardcore between .

The measure is also part of a broader effort to see Washington’s goal as an effort by Washington to enlist corporations to exploit emerging civilian technologies for military purposes.

The List of “Communist Chinese Military Companies” required the 1999 Pentagon to compile a list of companies “owned or controlled” by the People’s Liberation Army, but the DoD only compiled it in 2020.

This year, giants like Hikvision, China Telecom and China Mobile were added.

In November, the White House published an executive order, first reported by Reuters, that from November 2021 sought to give teeth to the list by preventing US investors from buying the securities of firms.

Top US asset managers Mohra Group and BlackRock Inc. own approximately 1% of each share of CNOOC Ltd, the listed entity of CNOCOC, and disclose approximately 4% of SMIC’s outstanding shares.

Congress and the Trump administration have increasingly sought to curb the US market penetration of Chinese companies not following the rules faced by US rivals, even if it means opposing Wall Street.

On Wednesday, the US House of Representatives passed a law calling for Chinese companies to kick off the US stock exchanges if they do not fully comply with the nation’s auditing rules, to threaten Trump before Trump leaves office Another instrument is given.

Reporting by Alexandra Alper and Humera Pamuk; Additional reporting by Meg Shen in Hong Kong, Luoyan Liu and Brenda Goh in Shanghai and Mike Stone in Washington; Editing by Simon Cameron-Moore and Clarence Fernandez

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