U.S. adds Chinese drone company DJI to economic blacklist


By: Reuters | Washington |

December 18, 2020 11:12:39 pm

The U.S. Commerce Department mentioned the motion in opposition to SMIC “stems from China’s military-civil fusion (MCF) doctrine and evidence of activities between SMIC and entities of concern in the Chinese military industrial complex.”

The United States added dozens of Chinese corporations, together with the nation’s high chipmaker SMIC and Chinese drone producer SZ DJI Technology Co Ltd, to a commerce blacklist on Friday because the U.S. President Donald Trump’s administration ramps up strain on China in his remaining weeks in workplace. Reuters first reported the addition of SMIC and dozens of further corporations early Friday.

The transfer is seen as the newest in Republican Trump’s efforts to cement his tough-on-China legacy as a part of prolonged struggle between Washington and Beijing over commerce and quite a few economic points.

The U.S. Commerce Department mentioned the motion in opposition to SMIC “stems from China’s military-civil fusion (MCF) doctrine and evidence of activities between SMIC and entities of concern in the Chinese military industrial complex.” The division additionally mentioned it was including the world’s largest drone company DJI to the listing together with AGCU Scientech; China

National Scientific Instruments and Materials, and Kuang-Chi Group for allegedly enabling “wide-scale human rights abuses within China through abusive genetic collection and analysis or high-technology surveillance.”

The companies didn’t instantly remark.

Commerce Secretary Wilbur Ross mentioned in a press release the division would “not allow advanced U.S. technology to help build the military of an increasingly belligerent adversary.”

Ross mentioned the federal government would presumptively deny licenses to stop SMIC from accessing expertise to produce semiconductors at superior expertise ranges: 10 nanometers or beneath.

In an handle to the Asia Society on Friday, China’s State Councillor Wang Yi, who can also be the nation’s overseas minister, famous the increasing listing of U.S. sanctions and referred to as on Washington to cease its “arbitrary suppression” of Chinese corporations.

The Commerce Department launched a listing of 77 corporations and associates to the so-called entity listing, together with 60 Chinese corporations. Reuters reported earlier the division was including about 80 corporations, most of them Chinese.

China’s overseas ministry mentioned that if true, the blacklisting could be proof of U.S. oppression of Chinese corporations and that Beijing would proceed to take “necessary measures” to shield their rights.”

We urge the U.S. to stop its mistaken habits of unwarranted oppression of overseas corporations,” ministry spokesman Wang Wenbin advised a daily information convention in Beijing on Friday. SMIC didn’t instantly reply to requests for remark.

The designations by the Commerce Department embody some entities in China that allow alleged human rights abuses and a few serving to it assemble and militarize synthetic islands within the South China Sea, the company mentioned.

It additionally cited entities that acquired U.S.-origin gadgets in assist of the People’s Liberation Army’s applications, and entities and individuals that engaged within the theft of U.S. commerce secrets and techniques.

Companies beforehand added to the listing embody telecoms gear giants Huawei Technologies Co and 150 associates, and ZTE Corp over sanction violations, in addition to surveillance digicam maker Hikvision over suppression of China’s Uighur minority.

FRAYING TIESShares in SMIC, formally the Semiconductor Manufacturing International Corp, fell 5.2% in Hong Kong on Friday, whereas the company’s Shanghai-listed shares declined 1.8%. The benchmark indices within the two markets had been down lower than 1%.SMIC had already been in Washington’s crosshairs.

In September, the Commerce Department mandated that suppliers of sure gear to the company apply for export licenses after concluding there was an “unacceptable risk” that gear provided to it might be used for navy functions.

Last month, the Defense Department added the company to a blacklist of alleged Chinese navy corporations, successfully banning U.S. traders from shopping for its shares beginning late subsequent yr.SMIC has repeatedly mentioned that it has no relationship with the Chinese navy.

The entity listing designation will pressure SMIC to search a particular license from the Commerce Department earlier than a U.S provider might ship it key items, a part of a bid by the administration to curb its entry to subtle U.S. chipmaking expertise.

The Commerce Department added practically a dozen SMIC-affiliated corporations to the entity listing.SMIC is the most important Chinese chip producer however trails Taiwan Semiconductor Manufacturing Co, the trade’s market chief. It has sought to construct out foundries for the manufacture of laptop chips that may compete with these of TSMC.

Ties between Washington and Beijing have grown more and more antagonistic over the previous yr because the world’s high two economies sparred over Beijing’s dealing with of the coronavirus outbreak, imposition of a nationwide safety legislation in Hong Kong and rising tensions within the South China Sea.

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