China Plans a List of U.S. Firms to Block, in Answer to Trump - The New York Times

BEIJING — The Chinese government said on Friday that it was putting together an “unreliable entities list” of foreign companies and people, an apparent first step toward retaliating against the United States for denying vital American technology to Chinese companies.

China’s Ministry of Commerce said the list would contain foreign companies, individuals and organizations that “do not follow market rules, violate the spirit of contracts, blockade and stop supplying Chinese companies for noncommercial reasons, and seriously damage the legitimate rights and interests of Chinese companies.”

It did not give any details of which companies or entities it would include on the list, or what would happen to them. The ministry said that specific measures would be announced in the “near future.”

Still, the language echoes that of the United States government, which in recent months has placed Chinese companies on what it calls an “entity list” of firms that need special permission to buy American components and technology. Two weeks ago the Trump Administration placed Huawei, the Chinese maker of telecommunications gear, on the entity list, which could deny it access to microchips, software and other American-provided technology it needs to make and sell its products.

Shortly afterward, some American technology companies, including Google, said they would stop supplying Huawei. The American government has since granted Huawei a 90-day waiver, giving Chinese and American officials time to hammer out an agreement. The Trump Administration also is said to be considering putting Hikvision, a Chinese video surveillance company, on the list.

If Friday’s move is calculated to be a tit-for-tat strike back at American technology companies, Beijing will have ample targets. Major websites like Facebook, Twitter, and Google are blocked in China, and rules strictly control other businesses like online payments and cloud services.

Still, most American technology firms have a big presence in China. Both Google and Microsoft run sizable research and development operations in the country and their Android and Windows operating systems are ubiquitous on Chinese smartphones and computers. Google and Facebook likely pull in billions of dollars in advertising revenues from Chinese companies.

The vague announcement also opens the door to retaliation of other kinds, perhaps against individuals or companies who depend heavily on the Chinese market for selling their products. But China must be careful in how it retaliates, since many American companies are already reconsidering their dependence on the Chinese market and Chinese suppliers. If neither side backs off, the brinkmanship could permanently pull apart the supply chains that tie together the countries’ economies.

Mr. Gao, the ministry spokesman, said in the statement that the list would be aimed at those who block supplies and “take other discriminatory measures.”

“This not only damages the legitimate rights and interests of Chinese enterprises, and endangers China’s national security and interests, but also threatens the global industrial chain and supply chain security,” he added.

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