In a federal notification published recently, the US added 13 Chinese enterprises to a list of organisations that are receiving US exports but that inspectors are unable to inspect.

When U.S. export control officers are unable to finish their site visits to assess if a company can be trusted to receive goods and technology with U.S. origin, they are placed on the “Unverified List”. China’s commerce ministry must give its consent before U.S. inspectors can examine Chinese businesses.

U.S. exporters may need to apply for additional licences and must perform more due diligence prior to exporting goods to companies on the list, which acts as a warning sign.

PNC Systems in Jiangsu, Beijing Shengbo Xietong Technology, Guangzhou Xinwei Transportation, and Plexus in Xiamen are among the newcomers to the list.

The U.S. uses the list, among other measures, to prevent critical American goods and technology from ending up in the wrong hands. In order to protect American technology from China’s military modernization, it has also implemented broad prohibitions on the export of cutting-edge semiconductors and chip manufacturing machinery to that country. Tensions between the two nations have increased as a result of the tech war.

“The United States has been generalizing the concept of national security, adopting discriminatory and unfair practices against specific Chinese companies, and politicizing and weaponizing economic and trade issues,” Liu Pengyu, a spokesperson for the Chinese embassy in Washington, said in a statement after Tuesday’s actions. “The inclusion of Chinese companies in the ‘unverified list’ is another example.”

Biden administration policy is that Washington will begin the process of adding corporations on the Unverified List to the more restrictive “Entity List” after 60 days if a foreign government prevents U.S. officials from conducting site checks at those companies.

After conducting successful inspections, the United States removes corporations from the Unverified List, as it did with four companies on December 15.

The market capitalization of Wuxi Biologics, a Chinese company that produces components for AstraZeneca’s COVID-19 vaccine, dropped by around $10 billion when two of its units were placed on the Unverified List in February 2022.

A few months later, the company’s shares increased by more than 12% following an exclusive Reuters article revealing that Chinese authorities had permitted an American examination of the Wuxi factory. The building was removed from the list that October. 

Beijing Jin Sheng Bo Yue Technology, Tianjin’s Fulian Precision Electronics, Guangzhou Xinyun Intelligent Technology, Nanning Fulian Fu Gui Precision Industrial, Ningbo MOOF Trading, Shenzhen Bozhitongda Technologic, Shenzhen Jia Li Chuang Tech Development, Shenzhen Jingelang, and Xi’An Yierda are among the other businesses that were added to the Unverified List on Tuesday.

(Adapted from TBSNews.net)

Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy