China: corporate hit list created to counter the Trump Administration ban of Huawei

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The Chinese government will create its own black list of “unreliable” foreign companies, announced Friday the Ministry of Commerce, in full commercial and technological rivalry with the United States. The announcement comes as Chinese telecom giant Huawei was placed in May by Washington on a list of suspicious companies to which US entities may not sell technology equipment.

Huawei, which depends on American-made chips to equip its mobile phones, is seriously affected in its very existence, according to experts. The measure announced Friday by Beijing appears as a response to the offensive of the Trump administration against Huawei.

“Foreign companies, organizations and individuals who do not obey market rules, stray from the spirit of a contract, impose embargoes or stop supplying Chinese companies for non-commercial reasons and seriously to their interests and legitimate rights will be placed on a list of unreliable entities, “said the spokesman of the Chinese Ministry of Commerce, Gao Feng. This new measure is announced on the eve of the entry into force of new punitive tariffs in China on US products, nearly a year after the beginning of the commercial hostilities triggered by US President Donald Trump.

The terms of this measure, including its effective date, have not been specified. According to Rajiv Biswas of IHS Markit, subsidiaries and branches of US companies located outside China could also be targeted because “any Chinese restriction would likely apply to both the parent company and its global subsidiaries”.

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In addition, Beijing has to apply from Saturday new surtaxes on 5410 products “made in the USA” such as perfumes, wine, sporting good, which represent $60 billion in annual imports into the Middle Kingdom.

Highly confident despite the current trade tensions, Donald Trump said Thursday that it was in Beijing’s interest “to conclude an agreement.” The US president explained that the trade war had, according to him, “a devastating effect” on the Asian giant.

Beijing was quick to respond: “The United States has already uttered these lies more than once, each time China has denounced them but the United States is consistent, not to say obsessed, by repeating them”, has lashed out at the press a spokesman for the Ministry of Foreign Affairs.

The figures seem to give for the moment reason to the American president. Manufacturing activity in China contracted again in May, according to an index unveiled Friday by an official body. In particular, export orders fell sharply, according to this official index of purchasing managers.

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Eric Thomas

Eric, originally from Nigeria, currently resides in Florida and covers a wide range of topics for The talking Democrat.