Dozens of Chinese companies have been blacklisted by the U.S, including the country’s top chipmaker SMIC and drone manufacturer SZ DJI Technology Co.
“This action stems from China’s military-civil fusion doctrine and evidence of activities between SMIC and entities of concern in the Chinese military industrial complex,” the Commerce Department said in a statement on Friday.
Seventy-seven companies were on the list released by Commerce Department, 60 of which were Chinese companies.
“We will not allow advanced U.S. technology to help build the military of an increasingly belligerent adversary. Between SMIC’s relationships of concern with the military industrial complex, China’s aggressive application of military civil fusion mandates and state-directed subsidies, SMIC perfectly illustrates the risks of China’s leverage of U.S. technology to support its military modernization,” said Commerce Secretary Wilbur Ross.
Semiconductor Manufacturing International Corporation, SMIC, is the top Chinese chip manufacturer. The ban will now restrict the firm from buying key components from U.S. suppliers.
The stock price of SMIC fell 5.2% in Hong Kong after the announcement, which was first reported by Reuters early on Friday.
“Entity List restrictions are a necessary measure to ensure that China, through its national champion SMIC, is not able to leverage U.S. technologies to enable indigenous advanced technology levels to support its destabilizing military activities,” Ross added.
The latest sanction is seen as President Trump’s efforts to cement his tough-on-China legacy as part of ongoing trade wars and economic issues between the U.S and China.
Shortly after the ban was announced, China’s foreign minister, Wang Yi, called on the U.S to stop its “arbitrary suppression” of Chinese companies.
“We urge the U.S. to cease its mistaken behavior of unwarranted oppression of foreign companies,” ministry spokesman Wang Wenbin told a regular news conference in Beijing.
Companies that were previously blacklisted include tech giants Huawei Technologies Co and 150 affiliates, and ZTE Corp. Surveillance camera maker Hikvision was also included in the previous ban.
Huawei has been struggling with phone production since it was blacklisted last year. “We never thought that the U.S.’s determination to attack Huawei would be so strong, so firm,” Huawei founder and CEO Ren Zhengfei said at that time.
Ties between the world’s two largest economies, U.S and China, have grown increasingly antagonistic, especially since the coronavirus pandemic with each side blaming the other over the handling of covid-19 outbreak.