China targets the list of untrusted entities

China targets the list of untrusted entities

The Chinese government is increasingly putting pressure on foreign businesses operating in Beijing as the White House continues to target a number of Chinese tech companies.

The Chinese Ministry of Commerce announced provisions regarding “untrustworthy entities” on September 19.

“Beijing will likely put at least one US company on the list of untrusted entities between now and the end of the year, maybe even in the coming days but will use the tool in a targeted, special way especially in the early stages, ”said Michael Hirson, head of the China and Northeast Asian research division at consulting firm Eurasia Group, in the newly released report.

Chinese President Xi Jinping

“The advent of the list of untrustworthy entities underscores the dilemma of multinational corporations in China, which are caught between legal and political policies. of the US and its Western and Beijing allies, ”he said.

The Chinese Ministry of Commerce said in an online statement that the list of untrusted entities would not target a specific country or entity.

Other statements on the ministry’s website on the list of untrustworthy entities emphasize that China still welcomes foreign direct investment and foreign businesses, which are making an important contribution to the economy. nation.

An entity that is added to this list may be restricted or prohibited from trade or investment activities related to China and travel or work permits.

Actions from China will likely focus on products with domestic competitors and avoid disrupting imports of products that China’s tech industry needs, Hirson said in the report. . According to him, another factor could be the companies involved in the US sale of armed products to Taiwan.

According to consulting firm Eurasia, reasonable targets for China could include: Cisco, Dell / EMC, HP, Lockheed Martin, Rockwell Collins.

On the other hand, the report says less likely targets include:

Apple and Microsoft, “high global recognition and reputations as good corporate citizens in China”.

Chipmakers Qualcomm and Intel / AMD are “key suppliers who have made a strong effort to establish positive domestic relationships”.

Boeing – which “sells Apache helicopters to Taiwan, but its important role in the Chinese aviation industry and as a leading US company will make Beijing cautious about targeting and provoking.” any serious damage ”.

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