China urges US to correct mistake in targeting 33 Chinese firms
Published: Feb 08, 2022 10:00 PM
The Ministry of Commerce (MOFCOM) Photo: VCG

The Ministry of Commerce (MOFCOM) Photo: VCG

China on Tuesday urged the US to immediately correct its mistake after the US Commerce Department added 33 Chinese entities to a so-called unverified list to restrict their ability to receive shipments from US exporters, a move that Chinese officials and experts condemned as long-arm jurisdiction and a disruption to international trade order.

Some Chinese companies that were targeted by the US move were defiant, with some telling the Global Times on Tuesday that they see no real impact as they don't even import products from the US, while others are working actively to cope with the crackdown.

In a statement on Tuesday, the Chinese Ministry of Commerce (MOFCOM) said that China firmly opposes the US' move, while excoriating the US' multi-year political crackdown and economic bullying against companies.

"In recent years, the US has been using export controls as a tool of a political crackdown and economic bullying, constantly taking unilateral measures to crack down on foreign enterprises, institutions and individuals, which has caused damage to normal economic and trade ties between China and the US, harmed international trade rules and posed a serious threat to the global industry chain," the MOFCOM said.

The ministry urged the US to immediately correct its wrongdoings, return to the right track of win-win cooperation, and contribute to the stability of the global industry and supply chains and the recovery of the world economy.

The US Commerce Department on Monday said it had added 33 entities in China to its unverified list (UVL), also known as a red-flag list, for receiving US exports, saying that it was unable to establish the legitimacy of the entities and how export items would be used by them.

US exporters will now need a license to ship products to any of the companies on the list, while the Chinese companies must certify that they are legitimate and willing to comply with US regulations to come off the list.

But some Chinese companies that were targeted were defiant on Tuesday, saying that they see little impact from being added to the US' so-called unverified list.

Shenzhen Haimuxing Laser Technology Co said in a statement that there has been no significant impact on the operational or financial status of the company after one of its subsidiaries was put on the list.

Hefei Anxin Reed Precision Manufacturing Co, one of the enterprises on the list, said it was aware of the issue and was taking active steps to cope with the situation.

"The US products only account for a small proportion of our imports. It is not clear what impact entering the list will have on our company," the company told the Global Times in a statement on Tuesday.

Others said they don't even trade with US companies at the moment. Kunshan Heng Rui Cheng Industrial Technology Co told the Global Times that it has no imported products from the US.

Chinese pharmaceutical company WuXi Biologics said on Tuesday that it has seen no impact on its business after two of its subsidiaries were placed on the list, though its shares in Hong Kong plunged more than 30 percent on Tuesday morning before trading was halted.

In a conference call held by China Securities Co, senior executives from WuXi Biologics said that the main reason for its addition to the list is that the US Department of Commerce cannot come to China for verification due to the COVID-19.

The addition of the 33 Chinese companies brings the total number of listed entities to more than 170. Companies from Russia and the United Arab Emirates were among other countries on the list.

It is not surprising that the US has added 33 Chinese companies to the list, which is a continuation of the crackdown on Chinese high-tech companies that began under the Trump administration, and it is in line with the US Congress passing of the so-called America Competes Act of 2022, Dong Shaopeng, a senior research fellow at the Chongyang Institute for Financial Studies at Renmin University of China, told the Global Times on Tuesday.

"The move showed that the US has felt panic as China gradually moves to the high end of the industry chain," Dong said, adding that the abuse of so-called national security concerns to suppress high-tech enterprises will harm both US and Chinese companies.

Trade protectionism is also hurting US businesses, experts said.

The US will slowly lose the Chinese market after imposing export controls while the imposition of added tariffs on some daily necessities will directly affect consumer prices in the US and increase inflationary pressure, Bai Ming, deputy director of the international market research institute at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Tuesday.

On Monday, 41 US senators wrote to the office of the US Trade Representative asking the agency to create a more comprehensive process to exclude some Chinese imports from punitive tariffs.

"The calls from US society for comprehensive exclusions from tariffs placed on products from China showed that the sanctions imposed by some US politicians are a departure from economic rationality and harm the US economy," Bai said.