U.S. to blacklist dozens of Chinese firms including SMIC

(Washington) REUTERS: The United States is set to add dozens of Chinese companies, including the country’s top chipmaker SMIC, to a trade blacklist yesterday, two people familiar with the matter told Reuters.

The move, which has not previously been reported, is seen as the latest in President Donald Trump’s effort to cement his tough-on-China legacy. It comes just weeks before Democratic President-elect Joe Biden is set to take office on Jan. 20.

The Commerce Department is expected to add around 80 additional companies and affiliates to the so-called entity list, nearly all of them Chinese.

China’s foreign ministry said that if true, the blacklisting would be evidence of U.S. oppression of Chinese companies and that Beijing would continue to take “necessary measures” to protect their rights.

“We urge the U.S. to cease its mistaken behavior of unwarranted oppression of foreign companies,” ministry spokesman Wang Wenbin told a regular news conference in Beijing yesterday.

SMIC and the Commerce Department did not immediately respond to requests for comment.

The designations by the Commerce Department are expected to name some Chinese companies that Washington says have ties to the Chinese military, including some helping it construct and militarize artificial islands in the South China Sea, as well as some involved in alleged human rights violations, the sources said.

The Trump administration has often used the entity list - which now includes more than 275 China-based firms and affiliates - to hit key Chinese industries.

These include telecoms equipment giants Huawei Technologies Co and 150 affiliates, and ZTE Corp over sanction violations, as well as surveillance camera maker Hikvision over suppression of China’s Uighur minority.

Shares in SMIC, formally the Semiconductor Manufacturing International Corp, fell 5.2 percent in Hong Kong on Friday, while its Shanghai-listed shares declined 1.8 percent. The benchmark indices in the two markets were down less than 1 percent.

SMIC has already been in Washington’s crosshairs.

In September, the Commerce Department mandated that suppliers of certain equipment to the company apply for export licenses after concluding there was an “unacceptable risk” that equipment supplied to it could be used for military purposes.