USA’s Bear Hug infects China’s Ambitions

Sino-US relations have taken yet another blow as a fresh round of sanctions has been imposed- as announced by former US Secretary of State, Mike Pompeo.

Austere measures have been directed at Beijing officials involved in the dissolution of Hong Kong’s autonomy as well as the widespread human rights abuses in East Turkestan (Xinjiang Autonomous Region) and Tibet all year-long.

The Commerce Department released a list of Chinese companies, particularly those in the aviation sector, that will be blocked from buying US technology. The State Department, on the other hand, issued broader visa restrictions on Chinese officials.

The first portion of sanctions on ‘military end-user’ companies included 58 Chinese and 45 Russian companies. Among the 58 is, China’s state-owned military aerospace contractor, Aviation Industry Corporation of China (AVIC), a key supplier for commercial aircraft that Beijing has been desperately trying to bring to the market forefront.

The MEU list will now assist exporters in screening customers for military end-users and help combat Chinese& Russian efforts to divert US technology for their destabilizing military programs whilst enabling US to leverage its partnerships with global companies.

Companies on the list are now subject to special export licensing requirements.

Several companies that produce military aircraft are on the list- Chengdu Aircraft, Guizhou Aviation, Harbin General Aircraft, Shaanxi Aircraft Industry, Shenyang Aircraft Corporation, and Xian Aircraft Corporation. Other major companies on the list include the Institute of Pharmacology and Toxicology’s Laboratory of Toxicant Analysis and the Second Institute of Oceanography, a unit of China’s Ministry of Natural Resources.

The state-owned company, Commercial Aircraft Corporation of China (COMAC), building China’s first domestically produced commercial aircraft was not a part of the list. Commerce Secretary Wilbur Ross has mentioned that the list is protractible.

China’s Semiconductor Manufacturing International Corporation (SMIC) has also been hit as US exporters have to now apply for a license before they can sell to SMIC.

China had been relying on SMIC, its biggest chipmaker, to reduce reliance on Intel (INTC) and Samsung (SSNLF).

Although Chinese substitutes have emerged in parts of the supply chain, their specifications are typically two to three generations behind. SMIC now faces financial complications as investors are backing out. The company has lost 4.5% of its US-listed shares since the US ban was announced.

US Secretary of State, Mike Pompeo, announced visa restrictions and financial sanctions,as authorized under the US Immigration and Nationality Act, on several Chinese officials for their role in curbing freedom of expression and human rights breaches in Hong Kong, Tibet and East Turkestan.

The earlier list of similar sanctions included Hong Kong’s detested pro-Beijing Chief Executive Carrie Lam, XUAR Party Secretary Chen Quanguo, and Wang Chen, Vice-Chairman of the National People’s Congress Standing Committee.

The sanctions ban the officials and their family members from travelling to the U.S., block assets they own within the U.S., and ban American companies and individuals from dealing with them.

Chinese State Councilor and Foreign Minister Wang Yi and Russian Foreign Minister Sergei Lavrov, in a telephonic conversation, discussed the need for collaboration between the two nuclear-powered countries ‘to staunchly protect the basic norms of international relations and ensure world fairness and justice’.

Lavrov called for the ‘championing international law, safeguarding the common interests of the two countries and safeguarding international stability and cooperation’.

As a mountain of pieces of evidence of genocide and human rights abuses in China come to light, these statements are comical, to say the least.