Connect with us

Hi, what are you looking for?

Economy

US drafts list of 89 Chinese firms with military ties

THE TRUMP administration is close to declaring that 89 Chinese aerospace and other companies have military ties, restricting them from buying a range of US goods and technology, according to a draft copy of the list seen by Reuters.

The list, if published, could further escalate trade tensions with Beijing and hurt US companies that sell civil aviation parts and components to China, among other industries.

A spokesman for the US Department of Commerce, which produced the list, declined to comment. The Chinese foreign ministry did not immediately respond to a request for comment.

Commercial Aircraft Corp. of China Ltd. (COMAC), which is spearheading Chinese efforts to compete with Boeing and Airbus, is on the list, as is Aviation Industry Corporation of China (AVIC) and 10 of its related entities.

The list is included in a draft rule that identifies Chinese and Russian companies the US considers “military end users,” a designation that means US suppliers must seek licenses to sell a broad swath of commercially available items to them.

According to the rule, applications for such licenses are more likely to be denied than granted.

US President Donald Trump has stepped up his actions in recent months against China. Ten days ago, he unveiled an executive order prohibiting US investments in Chinese companies that Washington says are owned or controlled by the Chinese military.

The pending list comes after the Commerce Department expanded the definition of “military end user” in April.

The April rule includes not only armed service and national police, but any person or entity that supports or contributes to the maintenance or production of military items — even if their business is primarily non-military.

The export restriction applies to items as disparate as computer software like word processing, scientific equipment like digital oscilloscopes, and aircraft parts and components.

In terms of aircraft, the items include everything from brackets for flight control boxes to the engines themselves.

News of the list comes at a sensitive time for the US aerospace industry as Boeing seeks Chinese approval of its 737 MAX after it was cleared by US regulators last week. In March 2019, China was the first nation to ground the jet following two fatal crashes and it is already expected to wait months to lift the ban. A spokesman for Boeing declined to comment.

Washington trade lawyer Kevin Wolf, a former Commerce official, said Commerce had shared the draft rule with a technical advisory committee of industry representatives, and it should have been kept confidential.

Mr. Wolf said the rule and list still could be modified and that the clock was running out for it to go into effect under the Trump administration since it would need to be cleared and sent to the Federal Register, the official US publication for rules, by mid-December.

In the draft rule seen by Reuters, the Commerce Department said being able to control the flow of US technology to the listed companies was “vital for protecting US national security interests”.

But a former US official who did not want to be identified, said “merely creating a list and populating it is a provocative act.” An aerospace industry source said it could spur China to retaliate.

The inclusion of COMAC would come as a surprise to at least one major US supplier, which had determined the company was not a military end user, the industry source said.

A list also would provide European competitors with an opening to promote their manufacturers, by pointing out they do not have to clear such hurdles, even if the US grants the licenses, the industry source said.

General Electric Co. (GE) and Honeywell International, both supply COMAC and have joint ventures with AVIC.

A GE spokesperson said its global joint ventures operate in compliance with all laws, and that the company has worked to obtain licenses related to military end users.

A Honeywell spokeswoman declined to comment.

Besides the 89 Chinese listings, the draft rule also designates 28 Russian entities, including Irkut, which is also aiming to break into Boeing’s market with its MC-21 jetliner development.

The 117-company list is “not exhaustive,” the draft rule said, and is considered an “initial tranche.” — Reuters

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Investing

The goal for most businesses is to grow, so the concept of bad growth may seem counterintuitive to a lot of business owners. However,...

Investing

Employees of all companies will be able to request flexible working arrangements when they start new jobs under proposals to be published by ministers....

Investing

Our perspectives on remote working have changed dramatically over the course of the pandemic. No doubt many employers in 2019 would have assumed that...

Economy

The Bangko Sentral ng Pilipinas (BSP) lowered the country’s balance of payments (BoP) surplus projection for this year, reflecting the lower current account surplus and the risks...

Economy

The Securities and Exchange Commission (SEC) is encouraging more companies to tap the capital markets, in hopes that there would be over 800 companies listed at...

Economy

Outsourcing firms operating in economic zones are allowed to implement remote work arrangements until March 2022 as the pandemic continues, the Finance department said...

You May Also Like

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Economy

Ivermectin, an existing drug against parasites including head lice, has had a checkered history when it comes to treating COVID-19. The bulk of studies...

Investing

As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...

Economy

US President Joseph R. Biden, Jr., will rely on ally countries to supply the bulk of the metals needed to build electric vehicles and focus on...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.



Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!