China bans procurement from 46 US firms amid trade war
What's the story
In a major escalation of tensions with Washington, China has imposed export controls on 10 US companies and barred another 46 from its government procurement. The move comes as part of China's growing economic countermeasures against the United States. The companies affected by the new export controls include defense contractors, drone manufacturers, and entities such as Aveox, Red Cat Holdings, Teal Drones, and Jaia Robotics.
Export restrictions
Prohibition on exporting dual-use items
The Chinese Ministry of Commerce has prohibited exporters from supplying dual-use items to as many as 10 US entities. It has also barred organizations and individuals in any country or region from transferring or providing China-origin dual-use goods to these companies. Dual-use items are products, technologies, and materials that can be used for both civilian and military purposes.
Retaliation measures
'Retaliation against US's malicious actions'
The new restrictions are seen as a direct response to the US's decision to expand its list of Chinese companies allegedly linked with China's military. A spokesperson for China's commerce ministry said these measures were taken in retaliation against the "malicious actions" of the US government after the Pentagon added dozens of Chinese entities to its so-called "Chinese military companies" list.
Military companies list
Pentagon's updated list includes major Chinese firms
The Pentagon's updated roster also features several major Chinese firms such as Tencent, Huawei, CATL, DJI, China Mobile, China Telecom, and Hikvision. While being on the Pentagon's military companies list doesn't automatically lead to sanctions, it does carry reputational consequences and could be a precursor for future restrictions like export controls or procurement bans.
Procurement ban
China bans procurement from US companies
Along with the export controls, China's Ministry of Finance has also announced that 46 US companies would be barred from participating in government procurement activities. The list includes some of America's largest defense contractors such as Lockheed Martin, Raytheon, and Boeing's defense division. However, companies operating in China through locally invested entities will be exempt from this procurement ban.