Exclusive: Trump to add Chinese minimum wage and CNOOC to defense blacklist – sources

WASHINGTON (Reuters) – The Trump administration is set to add China’s leading chipmaker SMIC and national offshore oil and gas producer CNOOC to a blacklist of alleged Chinese military companies, document and sources say , which will restrict their access to US investors and worsen tensions with Beijing a few weeks before President-elect Joe Biden takes office

Reuters reported earlier this month that the Defense Ministry plans to designate four more Chinese companies as either owned or controlled by the Chinese military, bringing the number of Chinese companies affected to 35.

It was not immediately clear when the new installment would be published in the Federal Register. But the list includes China Construction Technology Co Ltd and China International Engineering Consulting Corp, in addition to Semiconductor Manufacturing International Corp (SMIC) and China National Offshore Oil Corp (CNOOC), according to the document and three sources.

The Department of Defense (DOD) did not respond to a request for comment.

The move, along with similar policies, is seen as aimed at consolidating the hard-to-China legacy of outgoing Republican President Donald Trump and locking new Democrat Biden into radical stances on Beijing amid anti-bipartisan sentiment. Chinese in Congress.

The list is also part of a larger effort by Washington to target what it sees as Beijing’s efforts to enlist companies to exploit emerging civilian technologies for military purposes.

Reuters reported last week that the Trump administration was on the verge of declaring that 89 Chinese aerospace companies and other firms had military ties, preventing them from purchasing a range of American products and technologies.

The minimum wage was already in Washington’s sights. In September, the US Department of Commerce imposed restrictions on exports to the company after concluding that there was an “unacceptable risk” that the equipment supplied to it could be used for military purposes.

The list of “Communist Chinese military enterprises” was mandated by a 1999 law requiring the Pentagon to compile a catalog of enterprises “owned or controlled” by the People’s Liberation Army, but the DOD only complied with 2020. Giants like Hikvision, China Telecom and China Mobile were added earlier this year.

This month, the White House issued an executive order, first reported by Reuters, that sought to give the list bite by banning U.S. investors from purchasing securities of blacklisted companies from November. 2021.

The directive is unlikely to deal a big blow to businesses, experts have said, due to its limited scope, uncertainty over the Biden administration’s position and the already limited holdings of U.S. funds.

Yet, combined with other measures, it is deepening a rift between Washington and Beijing, already at odds over the coronavirus and China’s crackdown on Hong Kong.

Congress and the administration have increasingly sought to curb access to the U.S. market for Chinese companies that do not comply with the rules facing their U.S. rivals, even if that means opposing Wall Street.