In hopes of making a renormalization in relations with Beijing next to impossible for Joe Biden, the Trump administration is poised to add China's top chipmaker SMIC and national offshore oil and gas producer CNOOC to a blacklist of alleged Chinese military companies, Reuters reported citing a document and sources, curbing their access to U.S. investors and escalating tensions with Beijing.
The latest crackdown comes after a report from Reuters earlier this month that the Department of Defense was planning to designate four more Chinese companies as owned or controlled by the Chinese military, bringing the number of Chinese companies affected to 35.
"The Company has no relationship with the Chinese military and does not manufacture for any military end-users or end-uses." Shares in SMIC closed 2.7% lower on Monday.
Later on Monday, Bernstein Research downgraded CNOOC Ltd's stock to 'market perform' by applying a 30% discount to share price targets, citing sanction risks that range from a ban on U.S. funds owning CNOOC stock to prohibiting US companies from doing business with CNOOC. China's foreign ministry spokeswoman Hua Chunying said, in response to a question about Washington's planned move, that China hoped the United States would not erect barriers and obstacles to cooperation and discriminate against Chinese companies.
Reuters reported last week that the Trump administration is close to declaring that 89 Chinese aerospace and other companies have military ties, restricting them from buying a range of U.S. goods and technology.
The list of "Communist Chinese Military Companies" was mandated by a 1999 law requiring the Pentagon to compile a catalog of companies "Owned or controlled" by the People's Liberation Army, but DOD only complied in 2020.
Giants like Hikvision, China Telecom and China Mobile were added earlier this year.
Monday, November 30, 2020
Trump Expands China Crackdown, Adds China's Top Chipmaker And Oil Producer To Defense Blacklist
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