Distinctive-U.S. to blacklist dozens of Chinese companies like SMIC, sources say

By Alexandra Alper, David Shepardson and Humeyra Pamuk

WASHINGTON, Dec 17 (Reuters) – The United States is established to include dozens of Chinese companies, like the country’s best chipmaker SMIC 0981.HK, to a trade blacklist on Friday, two people acquainted with the issue advised Reuters on Thursday.

The move, which has not earlier been reported, is observed as the most up-to-date in President Donald Trump’s effort to cement his tricky-on-China legacy. It comes just weeks prior to Democratic President-elect Joe Biden is established to choose place of work on Jan. 20.

In total, the United States is envisioned to include all-around 80 further providers and affiliate marketers to the so-called entity list, nearly all of them Chinese.

The designations by the Commerce Section are anticipated to title some Chinese corporations that Washington states have ties to the Chinese military, which include some encouraging it assemble and militarize synthetic islands in the South China Sea, as perfectly as some associated in alleged human legal rights violations, the sources said.

The Trump administration has typically used the entity listing – which now features additional than 275 China-dependent companies and affiliates – to hit vital Chinese industries.

These include telecoms gear giants Huawei Systems Co HWT.UL and 150 affiliate marketers, and ZTE Corp 000063.SZ more than sanction violations, as nicely as surveillance camera maker Hikvision 002415.SZ above suppression of China’s Uighur minority.

SMIC, the Semiconductor Producing Intercontinental Corp, has by now been in Washington’s crosshairs.

In September, the Commerce Department mandated that suppliers of particular gear to the organization utilize for export licenses just after concluding there was an “unacceptable danger” that devices supplied to it could be applied for military functions.

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

Very last thirty day period, the Defense Section extra the company to a blacklist of alleged Chinese military providers, properly banning U.S. traders from buying its shares beginning late up coming calendar year.

SMIC has regularly reported that it has no partnership with the Chinese military.

The entity list designation would force SMIC to request a special license from the Commerce Office ahead of a U.S provider could ship it crucial merchandise, aspect of a bid by the administration to control its access to complex U.S. chipmaking technology.

Commerce is also anticipated to increase many SMIC-affiliated firms to the entity listing, the resources mentioned.

SMIC is the greatest Chinese chip company but trails Taiwan Semiconductor Producing Co 2330.TW, the industry’s sector chief. It has sought to make out foundries for the manufacture of computer system chips that can contend with TSMC.

Ties between Washington and Beijing have developed more and more antagonistic around the previous calendar year as the world’s leading two economies sparred in excess of Beijing’s handling of the coronavirus outbreak, imposition of a countrywide safety law in Hong Kong and climbing tensions in the South China Sea.

(Reporting by David Shepardson and Alexandra Alper Added reporting by Humeyra Pamuk, Mike Stone and Karen Freifeld Crafting by Humeyra Pamuk Editing by William Mallard)

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