Chinese Firms Opposed to Addition to U.S. Blacklist

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BEIJING, May 25 (TMTPost) A few Chinese companies, which the U.S. Commerce Department has added to the Entity List, have expressed their strong opposition to the decision and urged the U.S. government to stop politicalizing economic and technological activities.

Last Friday, a total of 33 Chinese companies, institutions and individual were effectively barred from importing or accessing U.S. technologies or products. U.S. Commerce Secretary Wilbur Ross said the action was to prevent the use of U.S. commodities and technologies in activities that undermine U.S. interests.

Qihoo360, a major cybersecurity firm that was listed on the NYSE in 2011 and delisted in 2015, said in a statement that it firmly opposed the irresponsible accusations and the U.S. government should not have politicalized business and technologies.

The company said the addition to the Entity List would cause some inconvenience but not disrupt its daily operations, adding that services to its customers would not be interrupted.

The company will continue to uphold its values regardless of the unfair treatment, develop proprietary technologies, build and safeguard internet infrastructure of the government and the private sector in China.

Beijing Cloudmind Technology, which is also to be placed on the Entity List, said in a statement that it regretted the decision but was prepared for the contingency.

The company said that it strictly complied with laws and regulations in relevant jurisdictions and will continue to apply its intellectual properties, provide products and services to clients and promote the healthy development of artificial intelligence.

SoftBank-backed Cloudminds Inc. submitted its IPO application to the SEC in July 2019 but its chances for a successful listing got very slim as investor appetite for loss-making startups tumbled.

Also in July 2019, the U.S Department of Commerce reportedly sent a letter to Cloudminds Inc., asking the company not to transfer technologies or information on technologies (including software loopholes) from its U.S. subsidiary to its Chinese subsidiary.

Repatated Actions on Chinese Tech Firms

The Trump Administration has engaged in year-long hostility towards Chinese technology firms since last May. On May 15, 2019, the U.S. Department of Commerce announced its decision to add Huawei Technologies Co. Ltd. and its 68 non-U.S. affiliates to the Entity List, accusing the China-based telecom giant’s activities of being “contrary to U.S. national security and foreign policy interest”. Huawei’s addition to the list means that the sale or transfer of American technology to Huawei requires permission from the U.S. government.

In late June, the department added five more Chinese tech companies to the Entity List over national security concerns. The entities are one of China’s leading supercomputer makers, Sugon; three subsidiaries set up to design microchips, Higon, Chengdu Haiguang Integrated Circuit and Chengdu Haiguang Microelectronics Technology; and the Wuxi Jiangnan Institute of Computing Technology. They lead China’s development of high-performance computing, some of which is used in military applications like simulating nuclear explosions, according to the department.

In August 2019, the Department of Commerce placed additional 46 non-U.S. affiliates of Huawei on the list, saying that their activities also posed a threat to U.S. national security.

In October, the department announced the decision to add 28 Chinese governmental and commercial organizations to the Entity List for engaging in or enabling activities contrary to the foreign policy interests of the United States. They included Dahua Technology, Hikvision, IFLYTEK, Megvii Technology, Sense Time, Xiamen Meiya, Pico Information Co. Ltd.; Yitu Technologies and Yixin Science and Technology Co. Ltd as well as police authorities in the regions where the companies were registered.