China announced it will establish a non-reliable entity list targeting foreign companies which harm the “legitimate rights and interests” of Chinese groups, ratcheting up tensions between the US and China.
The move comes as the Trump administration has heaped pressure on Huawei, one of China’s corporate champions. “Some foreign entities violate market norms, break the spirit of business contracts, block Chinese enterprises and use discriminatory measures for non-commercial purposes,” China’s Commerce Ministry spokesman Gao Feng told reporters on Friday.
Some of these companies threaten the global supply chain, endanger China’s national security and negatively impact the global economy, Mr Gao added. China said the non-reliable entity list is designed to safeguard the international economy and the multilateral trading system as well as fight against unilateralism and trade protectionism.
The announcement comes as retaliatory tariffs from China worth $60bn kick in on Saturday, a response from China after the US imposed 25 per cent tariffs on $200bn of Chinese goods earlier in May. “China is sticking to its strategy of proportionate, targeted retaliation against hostile trade and economic actions by the US,” said Eswar Prasad, a US-based China expert with close ties to Chinese economic policymakers. “The question now is which major US corporate entities operating in China will be seen as suitable targets to hit back against US sanctions on Huawei.” The Chinese Communist party’s tabloid The Global Times said US tech groups Google and Microsoft as well as the UK-based chip design company ARM risk being included in the entity list. Concrete details of how the entity list will work in practice have yet to be released, Mr Gao said.