In yet another critical move, the United States of America appears to have listed 11 more companies which include China Space sat(60018.SS), China Communications Construction Co and Sinochem Group in addition to 20 from earlier in the year, which the Pentagon deems as having links and being backed by the Chinese military.
The Trump administration is said to believe that these companies are owned or controlled by the Chinese Armed Forces, operating either directly or indirectly in the United States mainland.
The release of this list by the Pentagon comes after being subject to a lot of pressure by both the Democrat as well as the Republican party, amidst rising tension between the two countries on matters concerning trade, technology and foreign policy. As the People’s Republic of China attempts to blur the lines between civil and military sectors, knowing your supplier’ is critical, Pentagon spokesman Jonathan Hoffman said in a statement.
“We envision this list will be a useful tool for the U.S. government, companies, investors, academic institutions, and like-minded partners to conduct due diligence with regard to partnerships with these entities, particularly as the list grows.”
These companies are said to be involved in some way or the other with the construction and military actions taking place in the South China Sea.
This specific listing does not levy penalties of any kind yet, but the Defense Authorization Act of 1999 mandates that upon completion of the list, The President of the United States may impose sanctions that block all the property of the listed parties.
There hadn't been an official reply from China's foreign and defense ministries yet, however one of the earlier twenty companies to be listed, Hangzhou Hikvision Digital Technology has remarked that the US move was baseless, since it's ownership details have always been of public record as an independently operated enterprise. The company is willing to work with the US government to clear up any misgivings and correct any misunderstandings, to return to its previous status.
It is believed, however, that this move by the US, is not entirely baseless. China has long followed a policy commonly referred to as civilian-military integration that allows companies from both sectors to share in dual-use technologies.
This move appears to be highly supported by both government officials as well as Chinese experts from government-affiliated think tanks, and as Derek Scissors, a Chinese expert at the American Enterprise Institute claims, it's a move that is "long overdue".
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