U.S. Expands Export Restrictions on Technology to Chinese Shipbuilders

Singapore freight forwarders – Star Concord
21-Dec-2020

The U.S. Commerce Department announced new trade enforcement actions against Chinese companies as part of the Trump administration’s disputes with China over its human rights abuses, actions in the South China Sea, and use of U.S. technology. Among the 77 companies being added to the “Entity List” that limits exports to the companies are the Chinese semiconductor industry and an expansion of the listed companies in the shipbuilding industry. 

“These seventy-seven entities have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States,” the statement said in releasing the list which will be entered into the Federal Register on December 22. Inclusion on the list imposes export license requirements, and limits the availability of most license exceptions, to the companies. The export license requirements are on goods, software, and technology made in the U.S. or containing substantial portions of U.S.-origin technology.

Among the companies to be included in the latest revision of the list are Semiconductor Manufacturing International Corporation Incorporated (SMIC) added for its support of the Chinese military. The list also expands the scope of the limits placed on China State Shipbuilding Corporation (CSSC), the world’s largest commercial shipbuilder and China’s primary naval shipbuilder, targeting its research activities for acquiring and attempting to acquire U.S. technology in support of programs for the People’s Liberation Army. 

Other restrictions that will also impact the maritime community include China Communications Construction Company (CCCC), the world’s largest port construction and dredging company, for its efforts enabling China to reclaim and militarize disputed outposts in the South China Sea. The list also cites a range of other companies in Chinese shipbuilding and construction, including Chongqing Chuandong Shipbuilding, CSSC Huangpu Wenchong Shipbuilding, Guangxin Shipbuilding, and Guangzhou Taicheng Shipbuilding, for their involvement in China’s efforts in the South China Sea.

Commenting on the latest efforts, Commerce Secretary Wilbur Ross cited China’s militarization of disputed outposts in the South China Sea, unlawful maritime claims in the South China Sea, and intimidation and coercion of other coastal states lawfully accessing and developing offshore marine resources. He also singled out China’s campaign of malign technology acquisition efforts, including for theft of U.S. trade secrets, and the support of research and development, and production of advanced weapons systems.

The latest round of sanctions builds on efforts the Trump administration launched in August. During the summer, CCCC and CSSC were also cited for their actions in support of China’s efforts in the South China Sea. The Trump administration also issued an executive order prohibiting Americans from buying or holding stock in 31 Chinese firms with military ties. Issued in November, that order also included China State Shipbuilding Corporation and China Communications Construction Corporation, among others.
 

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