China Working on Its Own Blacklist in Response to the Huawei Ban

May 31, 2019
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The past couple of weeks have been particularly rough for Huawei thanks to a US government directive asking all US-based companies to cease doing business with the Chinese telecommunications behemoth. As a result, Huawei can no longer use Android on its devices, along with a host of other technologies that make a smartphone tick. The U.S. could potentially add new companies to the entities list such as Zhejiang Dahua Technology Co. and Hangzhou Hikvision Digital Technology Co. In what looks like a response to the US cracking down on Huawei, the Chinese government is reportedly working on its own version of a blacklist that may target US-based firms.

The Chinese Commerce Ministry’s spokesperson Gao said in a statement to Bloomberg that the list would include companies that pose a threat or potential threat to national security. The list will also include foreign enterprises, organizations and individuals that don’t obey market rules, violate contracts and block, cut off supply for non-commercial reasons or severely damage the legitimate interests of Chinese companies. China is setting up the list to protect international economic and trade rules and the multilateral trading system, to oppose unilateralism and trade protectionism, and to safeguard China’s national security, social and public interests.

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Companies based outside the US and rare earth mineral exports to be affected too

The affected companies will include the likes of Alphabet Inc, Apple, Qualcomm and other tech giants. China is also expected to target companies that are based outside of the US as well. Japan-based Toshiba and Panasonic and Britain’s ARM who have both cut all ties with Huawei following the US court order. ARM states that the reason they stopped conducting business with Huawei is that their products contained US-origin technologies.

China has also considered is restricting exports of rare earth minerals to the U.S. The minerals are essential for the manufacture of high-tech electronics, automobiles, and even for defence. China is the largest supplier with around 35% of the world’s reserves and responsible for 70% of the mining done in 2018. We can expect to hear more about the situation after the next meet at the G-20 Summit which will be held at the end of June.

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