In further commercial friction in the so-called Cold War 2.0, the United States government added several companies from China to a list created by the Department of Defense of agents that would be operating in American territory in conjunction with Beijing’s military forces.
The measure, according to officials, is part of an effort to prevent sensitive American technology information from being accessed by the Chinese intelligence sector. Added to the list, according to the Reuters news agency, were chip manufacturer YMTC, artificial intelligence company Megvii, hardware manufacturer Hesai Technology, technology company NetPosa, among others.
Suspicions of espionage have increased in recent months, given growing tensions between the US and China. The trigger for the crisis occurred in February last year, when the Pentagon announced the discovery of a Chinese balloon flying over American territory. The object was shot down by a fighter jet, in an action considered exaggerated by Beijing. Washington says the downed device was a spy instrument, while the Chinese regime says it was research equipment.
The update to the list increases the number of measures adopted by Washington in recent years to restrict the activities of Chinese companies that could, according to the Pentagon, strengthen the Asian giant’s Armed Forces.
In response, a spokesperson for China’s embassy in Washington said the decision is an abuse of power and contradictory to “American’s supposed commitment to market competition and international fair trade.” In a statement, the Asian country’s Ministry of Foreign Affairs called on the US to “immediately rectify discriminatory practices” and offer Chinese companies “a fair, equitable and non-discriminatory environment”.
“[A decisão] it violates the principles of market competition and the international economic rules that the country has always defended, in addition to undermining the confidence of foreign companies in investing and operating in the USA”, said spokesperson Wang Wenbin this Thursday (1st).
The measure does not involve immediate punishments, but it could represent a blow to companies’ reputations, as the document warns US business sectors about the risks of doing business with listed companies. The update should also increase pressure on the Treasury Department to sanction more Chinese companies.
Hesai Group said it has no ties to or sells products to any country’s military. The company said it was disappointed to be included on the list. YMTC and Megvii did not respond to requests for comment made by Reuters.
As part of the effort to prevent leaks of classified information, inclusion on the list should prevent Chinese companies from doing business with the US Department of Defense in the coming years. “The Defense Department’s updated list underscores China’s unwavering commitment to its military-civil fusion strategy,” said Craig Singleton, senior fellow at the Foundation for Defense of Democracies, an institute producing strategic knowledge on national security.
Other companies added to the list include China Three Gorges Corp, China Construction Technology Co and Yitu Network Technology, as well as publicly traded companies such as Chengdu JOUAV Automation Tech Co 688070.SS, Chengdu M&S Electronics Technology Co 688311.SS, Guizhou Aviation Technical Development Co 688239.SS and ShenZhen Consys Science & Technology Co 688788.SS.
They join previously listed aviation company AVIC, BGI Genomics Co, China Mobile 0941.HK, energy company CNOOC 600938.SS and China Railway Construction Corp 601186.SS.
In parallel, on Wednesday (31), US officials, including FBI Director Christopher Wray, warned that hackers linked to Beijing are preparing to cause “real-world damage” by targeting critical American infrastructure, such as stations water treatment, electrical network, oil and natural gas pipelines, as well as transport centers.
The American government has made efforts in recent years to make it difficult for the Chinese to develop cutting-edge weapons and other technological resources for military use. The measure that prompted more protests from Beijing restricts the export of tools for producing semiconductor chips to China.
Semiconductors are essential for the development of supercomputers and other resources with military applications, such as artificial intelligence, the development of nuclear weapons and hypersonic missiles.