President Donald Trump is about to blacklist two Chinese firms – Semiconductor Manufacturing International Corp (SMIC), and China National Offshore Oil Corporation (CNOOC). This would mean that investors in the United States would no longer have access to the companies. The move would also heighten tensions between the two countries just before President-elect Joe Biden is set to resume office, CNBC reports.
The companies would not be the first to be blacklisted if the present administration later confirms the reports as over 30 Chinese companies have already been blacklisted as a result of claims that they are connected to the Chinese military. Trump recently issued an executive order that would ensure that starting from late 2021, American investors would not be able to invest in the blacklisted firms.
It was reported earlier in the month, that the Department of Defense wanted to add four more firms to the existing blacklist which would bring the list of companies to 35. The companies announced then, according to reports are China Construction Technology, China International Engineering Consulting, SMIC, and CNOOC.
The chip-making company, SMIC, has denied having any connection with the Chinese military and has even stated that it does not offer services to any military end-users. The company stated that its businesses deals with the United States have always been “open and constructive”
This is not the first time that the company has had problems dealing with the present administration. In September, the Department of Commerce instructed some US companies that supply equipment to SMIC that they can only do that after procuring a special license that would permit them to render services to the Chinese company since there were reports that the equipment is probably used to enhance the goals of the Chinese military, Yahoo writes.
If the companies are blacklisted, the movie would be one of the last policies of the Trump administration to project its strict China policy. It could also prove to be uncomfortable for the incoming administration of Biden who seems to have a different point of view about US-China relations. This is yet to be confirmed as the Biden transition office has not given any comment in response to the reports.
The blacklisted companies represent a part of the administration’s fight against Chinese companies because of their alleged involvement with the Chinese military. The administration has several times reported that some companies are being used to further the technological advancements of the Chinese military.
A 1999 law mandated the Pentagon to compile a list of “Communist Chinese Military Companies” but the efforts started early this year when the Department of Defense blacklisted companies such as China Telecom, Hikvision, and China Mobile. Media outlets also reported last week that the list would be swelled with the addition of 89 Chinese companies thought to have some kind of connections with the Communist party.
Source: cnbc.com
