The U.S. Commerce Department said Friday it added China'sSemiconductor Manufacturing International Corp. and drone manufacturer SZ DJI Technology Co. to its trade blacklist, a move that could further escalate tensions between the world's two largest economies ahead of President Donald Trump's departure from office.
Trump also signed into law a bill that could prevent Chinese companies from listing on U.S. stock exchanges if they fail to comply with domestic auditing standards.
SMIC was placed on the Commerce Department's "Entity List" amid allegations that the major chipmaker poses national security risks to the United States.
DJI, which is said to have a market share of 70 percent, was among dozens more entities blacklisted the same day over China's alleged human rights abuses, militarization of the South China Sea and theft of U.S. trade secrets.
Citing SMIC's "relationships of concern" with the Chinese military-industrial complex, Commerce Secretary Wilbur Ross said in a press release, "We will not allow advanced U.S. technology to help build the military of an increasingly belligerent adversary."
Due to the action, SMIC will have limited ability to acquire certain U.S. technologies as American exporters are required to apply for a license to sell to the company. The applications will be reviewed under a "presumption of denial" policy, suggesting that permission will generally be refused.
SMIC plays a key role in China's ambition to develop a self-sufficient semiconductor industry.
Reacting to a media report on the blacklisting of SMIC, Chinese Foreign Ministry spokesman Wang Wenbin said at a press conference on Friday in Beijing that the move is "another proof that the United States has been using its state power to crack down on Chinese companies."
"China firmly opposes such practices," he said.
On DJI, the Commerce Department said it was among entities that have enabled "wide-scale human rights abuses within China" through abusive genetic collection, analysis or high-technology surveillance and other activities contrary to U.S. foreign policy interests.
"China actively promotes the reprehensible practices of forced labor, DNA collection and ubiquitous surveillance to repress its citizens in Xinjiang and elsewhere," the department said in a separate press release, referring to the treatment of Uyghur Muslims and other ethnic and religious minority groups in the country.
Adding to further pressure on China, the Holding Foreign Companies Accountable Act was made into law, requiring public companies to disclose whether they are owned or controlled by a foreign government.
It also prohibits securities of a company from being listed on any of the U.S. exchanges if it has failed to comply with audits conducted by a Congress-established watchdog for three years in a row.
The United States is concerned that Beijing continues to deny U.S. audit regulators full visibility into the financials of U.S.-listed Chinese companies in line with U.S. accounting standards.
Under the Trump administration, the U.S.-China confrontation has intensified on various fronts including technology security, Hong Kong, Taiwan, human rights issues and control over the South China Sea.
Bilateral tensions are likely to continue under the incoming administration of President-elect Joe Biden, who has vowed to take a tough stance against China over what Washington views as abusive trade practices and human rights violations.
© Kyodo News International, Inc., source Newswire