DJI and SMIC are among 60 newly-added Chinese companies on the US Entity List

nanoguy

Posts: 734   +12
Staff member
In context: The US Department of Commerce had already warned suppliers of several Chinese companies to apply for export licenses in light of a growing risk that American technology could be used by the Chinese government for military and surveillance purposes. Now, it's banning tens of Chinese companies from dealing with American companies or companies that use American-made equipment.

The US Bureau of Industry and Security (BIS) in the Department of Commerce today announced it will add no less than 60 Chinese companies to the Entity List, which will effectively restrict their access to key US technologies, including their ability to partner up with US-based hardware and software companies.

The move is one of the last efforts of the Trump administration to maintain a hard line on China before Joe Biden is sworn into office on January 20, 2021. The Entity List now includes DJI -- one of the biggest drone manufacturers in the world -- as well as the Semiconductor Manufacturing International Corporation (SMIC), China's largest chip foundry.

The two companies are subject to the same ban as Huawei, meaning this will impair their ability to secure essential components and equipment that would constitute exports of US technology. And from what we've seen with Huawei, the restrictions can have devastating effects, forcing them to divest from some of their lucrative lines of business.

For American consumers, DJI products will become much more difficult to find on top of being subject to import taxes. SMIC is a different story, as it's part of China's strategy to become technologically self-sufficient and key for projects such as Huawei's server GPUs, desktop CPUs, 5G-enabled mobile SoCs, and a myriad of chipsets for the Internet of Things.

Commerce Secretary Wilbur Ross said in a statement that "we will not allow advanced U.S. technology to help build the military of an increasingly belligerent adversary. Between SMIC’s relationships of concern with the military industrial complex, China’s aggressive application of military civil fusion mandates and state-directed subsidies, SMIC perfectly illustrates the risks of China’s leverage of U.S. technology to support its military modernization."

China's Ministry of Foreign Affairs criticized the move, urging the US "to cease its mistaken behavior of unwarranted oppression of foreign companies," adding that China will take the "necessary measures" to protect their rights. That may include targeted antitrust probes into American companies operating in China as well as harsh export restrictions for products manufactured in the region.

Permalink to story.

 

Uncle Al

Posts: 8,001   +6,775
Biden has stated publicly that he won't be reversing any of Trumps decisions on China until he has taken a hard look at them. Considering the announced hacks by Russia and the implied spying by China the best thing Biden could do is to offer deep tax cuts and incentives for American companies to pull out of China and bring their entire operations back to the US. There are a number of components these companies would still be relying on from China but they could farm this work out to other more friendly countries and in short, get everything the heck out of China.

Like many things, we are learning the hard way that the global trade agreements are very fragile and can easily be upset by a few bad actors. Still, it has proven to be the way of the world so it's time to wake up and get things back in order for the good of everyone ....
 

Adorerai

Posts: 87   +55
China has their tentacles in the governments of the south eastern asian countries. Influencing and corrupting the leaders and hurting the people of those countries. Making deals with the corrupt governments, forcing the people to sell their land way below market value or have it taken away. That’s who we’re dealing with. They're very ambitious and ramping up their military.
 

QuantumPhysics

Posts: 4,705   +5,106
The US is hardly the only nation in the world waking up to the Chinese threat, and enacting bans against Chinese state-owned entities posing as free-market corporations. Australia, New Zealand, Japan, Taiwan, the UK, India, Sweden -- just to name a few.


Yes, it looks great on paper that America's allies, protectorates and buffer zones are fighting the good fight against China.

But in the big picture, China already took over Asia, and is taking over Africa and South America.

Guess what?

China's allies love it.
 

Endymio

Posts: 1,334   +1,216
Yes, it looks great on paper that America's allies, protectorates and buffer zones are fighting the good fight against China.
Anyone who believes India or Sweden are US protectorates or "buffer zones" is so far removed from the realities of modern géopolitique as to be beyond reason.

Guess what? China's allies love it.
China has no allies. They've created some debtor states through their Belt-and-Road initiative ... but even those nations are reconsidering the strings attached to those Chinese funds. Timeo Danaos et dona ferentes.
 

QuantumPhysics

Posts: 4,705   +5,106
Anyone who believes India or Sweden are US protectorates or "buffer zones" is so far removed from the realities of modern géopolitique as to be beyond reason.

China has no allies. They've created some debtor states through their Belt-and-Road initiative ... but even those nations are reconsidering the strings attached to those Chinese funds. Timeo Danaos et dona ferentes.


Anyone who believes “China has no allies” is so misinformed that I can only attribute it to a steady diet of right wing propaganda
 

psycros

Posts: 3,385   +3,858
Companies could move all their manufacturing to Mexico, have MUCH cheaper shipping and shorter supply chains, higher security if they were willing to pay for it AND help reduce illegal immigration by creating decent jobs south of the border. Of course, the best option would be to actually bring those jobs back to the US but we all know that's not going to happen unless we get a seriously protectionist government that can't be bought off by Wall Street.
 

Gomos

Posts: 58   +92
China has their tentacles in the governments of the south eastern asian countries. Influencing and corrupting the leaders and hurting the people of those countries. Making deals with the corrupt governments, forcing the people to sell their land way below market value or have it taken away. That’s who we’re dealing with. They're very ambitious and ramping up their military.
Wow! If that's what you are dealing with... you are dealing with a copy of yourselves!
 

Porkous

Posts: 128   +37
In a different tone. US tech was available to anyone. Since the world is such a mingle of comedy and drama, it does make sense that US, who was the beacon of some of the freedom in the world, and seen as the good actor, that some of this tech might have gone in the wrong hands. I remember one of their initiative through, for example, Radio Liberty, a beacon of free speech in WW2, Cold War era.

Imagine how wrong US went in the present when it allowed some of these ill minded opponents grab their high tech developed in the highly educated world.

I don't know half the story and that is my uneducated opinion. I would be inclined to see an unbiased psychological view on the matter or an article about this.
 
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duckofdeath

Posts: 285   +379
It is really funny that you guys think Biden will do an 180 on all this.

The US is still running a BIG trade deficit.
Biden won't change this, but it's nothing to do with trade. The "trade deficit" is intentional as some things are simply cheaper to make in countries with less/no regulation. The problem is Chinese military having too much influence on how chip manufacturers operate in China. Now that China can soon make everything within China, it's kind of a major security concern for anyone not aligned with Xi's ideas.
 

Heavens

Posts: 10   +5
Biden won't change this, but it's nothing to do with trade. The "trade deficit" is intentional as some things are simply cheaper to make in countries with less/no regulation. The problem is Chinese military having too much influence on how chip manufacturers operate in China. Now that China can soon make everything within China, it's kind of a major security concern for anyone not aligned with Xi's ideas.

See all those bans and restrictions do is force China to either:
- find a supplier with no ties to the US
- create the tech from scratch

Yes we are talking cutting edge tech here and China is 5-9 years behind on lithography but China doesn't need to catch up to TSMC to fulfill it's demand, 14nm equivalent tech is fine for everything apart from flagship smartphones.

The other thing is that, the government in China will not hesitate to throw billions at the problem to make sure it gets done.

In the big picture all it does is take away revenue from the western corporations for a small roadbump in Chinas plan for technical equality.
The other thing it gives China is an "enemy" to use for their propaganda (see Iran).
 

duckofdeath

Posts: 285   +379
See all those bans and restrictions do is force China to either:
- find a supplier with no ties to the US
- create the tech from scratch

Yes we are talking cutting edge tech here and China is 5-9 years behind on lithography but China doesn't need to catch up to TSMC to fulfill it's demand, 14nm equivalent tech is fine for everything apart from flagship smartphones.

The other thing is that, the government in China will not hesitate to throw billions at the problem to make sure it gets done.

In the big picture all it does is take away revenue from the western corporations for a small roadbump in Chinas plan for technical equality.
The other thing it gives China is an "enemy" to use for their propaganda (see Iran).
That isn't all it does. It also limits their potential market. With India blocking Chinese companies too, there is soon not much left other than countries with no buying power. That would force China into a recession that makes the fall of the Soviet union look like a small rounding error.
 

Endymio

Posts: 1,334   +1,216
Anyone who believes “China has no allies” is so misinformed that I can only attribute it to a steady diet of right wing propaganda
China has the vassal state of North Korea, and is mildly friendly with the so-called "Stan Nations". But allies, in the sense of nations with binding military treaties, or at least a history of close cooperation in military or geopolitical ventures? China has none. A decade ago, you might have been forgiven for calling Russia an ally, but relations with them and China have grown increasingly tense.

It also limits [China's] potential market. With India blocking Chinese companies too, there is soon not much left other than countries with no buying power.
And Chinese efforts to retaliate often backfire. The recent Chinese ban on importing Australian coal, for example, has caused several large Chinese cities to ration electricity, and even turn off power entirely for several hours each day.