China’s top chipmaker SMIC joins US sanctions hit list
Washington on Friday added China’s top chipmaker, SMIC, to its sanctions hit list – where it joined embattled telecom giant Huawei among other companies.
The Commerce Department said Semiconductor Manufacturing International Corp. and more than 60 others have ties with the Chinese military, and must be blacklisted to “protect U.S. national security.” They will be banned from access to U.S. technology, effectively cutting them off from component suppliers from the country.
Firms already on the list, which comprises 275 companies, include Huawei, ZTE and Hikvision.
The entities were found to have enabled human rights abuses, “supported the militarization and unlawful maritime claims in the South China Sea, [and] acquired U.S.-origin items in support of the People’s Liberation Army’s programs,” according to a government statement released on Friday. The United States should not allow “advanced U.S. technology to help build the military of an increasingly belligerent adversary,” said Commerce Secretary Wilbur Ross in the statement.
The sanctions are the latest blow to the chipmaker after departing President Donald Trump signed an executive order earlier this year barring Americans from investing in it. Global index provider MSCI subsequently said it planned to remove SMIC from its equities benchmark.
Beijing reacted furiously to the latest ban. “It will be another example of how the U.S. is using its national power to crack down on Chinese companies,” said Foreign Ministry spokesperson Wang Wenbin. “We urge the U.S. to stop its wrongful activities cracking down on foreign companies.”
There have recently been reports that suggested a widening division within the Trump administration over how far to go on sanctions against Chinese businesses before he leaves office in January. Opponents of harsher action believe it would in turn hurt firms on home soil. According to the Financial Times, the Treasury has sought a watered-down investment ban that would exclude subsidiaries of blacklisted companies from being banned from trading.
But the suggestion angered the Pentagon and the State Department, with officials worried it would make the executive order toothless.
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