Exclusive US to blacklist dozens of Chinese companies, including minimum wage, sources say

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WASHINGTON (Reuters) – The United States is expected to add dozens of Chinese companies, including the country’s largest chipmaker, SMIC, to a commercial blacklist on Friday, two people familiar with the matter told Reuters on Thursday.

The move, which has not been reported before, is seen as President Donald Trump’s latest attempt to solidify his tough-guy legacy against China. It comes weeks before Democratic President-elect Joe Biden takes office on January 20.

In total, the United States is expected to add around 80 more companies and subsidiaries to the so-called entity list, almost all of them Chinese.

Department of Commerce designations are expected to name some Chinese companies that Washington says have ties to the Chinese military, including some helping it build and militarize man-made islands in the South China Sea, as well as some involved in alleged human rights violations, sources said.

The Trump administration has often used the entity list – which now includes more than 275 China-based companies and subsidiaries – to reach out to major Chinese industries.

These include telecommunications equipment giants Huawei Technologies Co and 150 subsidiaries, and ZTE Corp for sanctions violations, as well as surveillance camera maker Hikvision for removing China’s Uyghur minority.

SMIC, the Semiconductor Manufacturing International Corp, has already been in Washington’s sights.

In September, the Commerce Department ordered suppliers of some of the company’s equipment to apply for export licenses after concluding that there was an “unacceptable risk” that the equipment supplied to it could be used at home. military purposes.

The SMIC, the Commerce Department and the Chinese Embassy in Washington did not immediately respond to requests for comment on Thursday.

Last month, the Defense Department added the company to a blacklist of so-called Chinese military companies, effectively banning U.S. investors from buying its shares from the end of next year.

The SMIC has repeatedly said that it has no connection with the Chinese military.

The designation of the list of entities would require the SMIC to apply for a special license from the Department of Commerce before a US supplier can send it key products, as part of an offer by the administration to restrict its access. to sophisticated American chip-making technology.

The trade is also expected to add many SMIC affiliates to the list of entities, according to the sources.

SMIC is China’s largest chip maker, but it is behind industry market leader Taiwan Semiconductor Manufacturing Co. She sought to build foundries to manufacture computer chips that could compete with TSMC.

Ties between Washington and Beijing have become increasingly antagonistic over the past year as the world’s two largest economies vie for Beijing’s handling of the coronavirus outbreak, the imposition of a law on national security in Hong Kong; and rising tensions in the South China Sea.

Reporting by David Shepardson and Alexandra Alper; Additional reporting by Humeyra Pamuk, Mike Stone and Karen Freifeld; Written by Humeyra Pamuk; Edited by William Mallard

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