US adds dozen Chinese tech companies to trade blacklist

Decision was made due to concerns China could use the enterprises to break US encryption

Department of Commerce sign on the Herbert Clark Hoover Building

The US Department of Commerce has added a dozen Chinese tech companies to its trade blacklist to prevent the Chinese army from gaining access to critical US technologies.

Among the newly-banned Chinese companies, eight specialise in quantum computing technologies and had sparked concerns that the country could leverage them in breaking US encryption or developing unbreakable encryption for the Chinese army.

Hangzhou Zhongke Microelectronics, Hunan Goke Microelectronics, New H3C Semiconductor Technologies, Xi'an Aerospace Huaxun Technology, and Yunchip Microelectronics have been added to the blacklist due to their "support of the military modernisation of the People's Liberation Army [PRC]”.

Meanwhile, Hefei National Laboratory for Physical Sciences at Microscale, QuantumCTek, and Shanghai QuantumCTeck had been banned for "acquiring and attempting to acquire US-origin items in support of military applications”.

Commenting on the decision, US Secretary of Commerce Gina Raimondo said that “global trade and commerce should support peace, prosperity, and good-paying jobs, not national security risks”. 

“The Department of Commerce is committed to effectively using export controls to protect our national security,” she added. 

Apart from the dozen Chinese companies, the governmental body also blacklisted 15 tech businesses from Japan, Pakistan, and Singapore, as well as determined that Russia’s Moscow Institute of Physics and Technology produces military products for the Russian army.

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“Today’s actions will help prevent the diversion of US technologies to the PRC’s and Russia’s military advancement and activities of non-proliferation concern like Pakistan’s unsafeguarded nuclear activities or ballistic missile programme,” said Raimondo.

Hours after the announcement, the Chinese Embassy in Washington released a statement saying that the US "uses the catch-all concept of national security and abuses state power to suppress and restrict Chinese enterprises in all possible means”.

"China is firmly opposed to that," the embassy’s spokesperson, Liu Pengyu, told Reuters.

The news comes weeks after the Federal Communications Commission (FCC) expelled China Telecom from the US, ordering the US subsidiary of a Chinese state-owned enterprise to stop providing domestic interstate and international communication services within its borders. This is due to the company reportedly being subject to exploitation, influence, and control by the Chinese government. China Telecom has until 27 December to comply with the FCC’s orders.

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