Pentagon calls out Chinese companies it says are helping Beijing's military (updated)

China Mobile

31/01/2024 16:10

(Adds Chinese embassy comment in paragraph 4)
    By Idrees Ali, Alexandra Alper and Michael Martina
       WASHINGTON, Jan 31 (Reuters) - The United States on
Wednesday added more than a dozen Chinese companies to a list
created by the Defense Department to highlight firms it says are
allegedly working with Beijing's military, as part of the
broader effort to keep American technology from aiding China.
    New additions to the list, first reported by Reuters, were
posted to the Department of Defense website and include memory
chip maker YMTC, artificial intelligence company Megvii, lidar
maker Hesai Technology  HSAI.O  and tech company NetPosa.
    Amid strained ties between the world's two biggest
economies, the updated list is one of numerous actions
Washington has taken in recent years to highlight and restrict
Chinese companies that is says may strengthen Beijing's
military.
    A spokesperson for the Chinese embassy in Washington said
China opposed the move and called it an abuse of state power,
adding that it ran counter to the U.S.'s "alleged commitment to
market competition and international fair trade."
    YMTC, Megvii and Hesai did not immediately respond to
requests for comment. 
        While being placed on the list doesn't involve immediate
bans, it can be a blow to designated companies' reputations and
represents a stark warning to U.S. entities and companies about
the risks of conducting business with them. It could also add
pressure on the Treasury Department to sanction the companies.
    In addition, the 2024 National Defense Authorization Act
added some teeth to the "Section 1260H" list, prohibiting the
Defense Department under Section 805 of the law in coming years
from contracting with any of the designated companies.
    "The Defense Department's updated 1260H list underscores
China's unwavering commitment to its military-civil fusion
strategy," said Craig Singleton, a senior fellow at the
Foundation for Defense of Democracies.
    "Being listed on 1260H poses major reputational risks to
Chinese companies," he added, noting that some Chinese firms
have tried to be removed from the list.
    Other firms added on Wednesday include China Three Gorges
Corp, China Construction Technology Co and Yitu Network
Technology, as well as publicly traded companies Chengdu JOUAV
Automation Tech Co  688070.SS , Chengdu M&S Electronics
Technology Co  688311.SS , Guizhou Aviation Technical
Development Co  688239.SS , and ShenZhen Consys Science &
Technology Co  688788.SS .
    They join previously listed aviation company AVIC, BGI
Genomics Co, China Mobile  0941.HK , energy company CNOOC
 600938.SS  and China Railway Construction Corp  601186.SS .
    Separately on Wednesday, senior U.S. officials, including
FBI Director Christopher Wray, warned that hackers linked to
China's government are preparing to cause "real-world harm" by
targeting critical U.S. infrastructure, such as water treatment
plants, the electric grid, oil and natural gas pipelines, and
transportation hubs.   

 (Reporting by Alexandra Alper, Michael Martina, Karen Freifeld
and Idrees Ali; Editing by Chris Sanders, Doina Chiacu, Lisa
Shumaker, Jonathan Oatis and Sonali Paul)
 ((doina.chiacu@thomsonreuters.com; 202-898-8322;))