Unreliable entity list to focus on US technology firms

By Hu Weijia Source:Global Times Published: 2019/6/3 19:58:40

Let's guess who is likely to be among the first batch of entities on China's "unreliable list" of foreign companies, organizations and individuals as the trade war with the US continues to escalate.

The Chinese government will consider four factors when deciding whether to put a foreign entity on the list, a senior Ministry of Commerce official said. The first factor is whether the foreign entity has adopted discriminatory measures against Chinese entities including a blockade or supply cut.

It means that all the companies that have cut ties with Chinese telecom giant Huawei now have a 25 percent chance of being placed on the unreliable entity list. 

Huawei in the past year released a list of its core suppliers, and 33 out of the 92 are US-based companies. Intel, Qualcomm, Microsoft and Oracle are on the list.

The US Commerce Department in May placed Huawei on its so-called Entity List, banning US companies from selling supply of parts or software to Huawei without US government approval. 

The second principle regarding China's unreliable list is whether the foreign entity violates market rules for non-commercial purposes. Even if US entities involuntarily cut ties with Huawei to follow US laws, they will have a 50 percent chance of being included on China's unreliable list. Let's take a look at how many US companies have already met the first two conditions for being included on China's unreliable list. While most US suppliers have yet to express their stance on the Huawei ban, media reports said Google, Intel, Qualcomm, and Broadcom took action to ban Huawei in one way or another. If those reports are true, those companies risk being put on the list.

The Chinese government will also consider two other factors - whether a foreign entity's actions cause actual damage to Chinese companies, and whether these actions pose actual or potential threats to China's national security. China is unlikely to randomly put foreign entities on the list to avoid disrupting the country's pace of further opening up its economy, but the list will be seen as a chance to eliminate hidden dangers in China's industrial chain. We believe detailed measures will be announced soon.

It's possible that China's "unreliable list" won't be very long, but it will carry weight and include well-known US companies that are strong enough to pose "actual or potential threats to China's national security." China is likely to concentrate its fire on US major core strategic technology forces with the list as a starting point, if Washington tries to weaponize US technology power to contain China's rise.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn


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