US Cracks Down on Chinese Companies for Security Concerns - The New York Times

WASHINGTON — The Biden medication connected Thursday stepped up its efforts to impede China’s improvement of precocious semiconductors, restricting different 36 companies and organizations from getting entree to American technology.

The action, announced by the Commerce Department, is the latest measurement successful the administration’s run to clamp down connected China’s entree to technologies that could beryllium utilized for subject purposes and underscored however limiting the travel of exertion to planetary rivals has go a salient constituent of United States overseas policy.

Administration officials accidental that China has progressively blurred the lines betwixt its subject and civilian industries, prompting the United States to spot restrictions connected doing concern with Chinese companies that whitethorn provender into Beijing’s subject ambitions astatine a clip of heightened geopolitical tensions, particularly implicit Taiwan.

In October, the medication announced sweeping limits connected semiconductor exports to China, some from companies wrong the United States and successful different countries that usage American exertion to marque those products. It has besides placed strict limits connected exertion exports to Russia successful effect to Moscow’s penetration of Ukraine.

“Today we are gathering connected the actions we took successful October to support U.S. nationalist information by severely restricting the PRC’s quality to leverage artificial intelligence, precocious computing, and different powerful, commercially disposable technologies for subject modernization and quality rights abuses,” Alan Estevez, the nether caput of commerce for manufacture and security, said successful a statement, referring to the People’s Republic of China.

Among the astir notable companies added to the database is Yangtze Memory Technologies Corporation, a company that was said to beryllium successful talks with Apple to perchance proviso components for the iPhone 14.

On Thursday, Congress passed a subject measure including a proviso that volition forestall the U.S. authorities from purchasing oregon utilizing semiconductors made by Y.M.T.C. and 2 different Chinese spot makers, Semiconductor Manufacturing International Corporation and ChangXin Memory Technologies, due to the fact that of their reported links to Chinese authorities information and quality organizations.

The U.S. authorities added the companies to a alleged entity database that volition severely restrict their entree to definite products, bundle and technologies. The targeted companies are producers and sellers of technologies that could airs a important information hazard to the United States, similar precocious chips that are utilized to powerfulness artificial quality and hypersonic weapons, and components for Iranian drones and ballistic missiles, the Commerce Department said.

In an emailed statement, Liu Pengyu, the spokesperson for the Chinese embassy successful Washington, said that the United States “has been stretching the conception of nationalist security, abusing export power measures, engaging successful discriminatory and unfair attraction against enterprises of different countries, and politicizing and weaponizing economical and sci-tech issues. This is blatant economical coercion and bullying successful the tract of technology.”

“China volition resolutely safeguard the lawful rights and interests of Chinese companies and institutions,” helium added.

On Monday, China filed a ceremonial situation to the Biden administration’s spot controls astatine the World Trade Organization, criticizing the restrictions arsenic a signifier of “trade protectionism.”

The medication said that immoderate companies, including Y.M.T.C. and its Japanese subsidiary, were added to the database due to the fact that they posed a important hazard of transferring delicate items to different companies sanctioned by the U.S. government, including Huawei Technologies and Hikvision.

The Commerce Department said that different entity, Tianjin Tiandi Weiye Technologies, was added for its relation successful aiding China’s run of repression and surveillance of Uyghurs and different Muslim number groups successful the Xinjiang portion of China, arsenic good arsenic providing U.S. products to Iran’s Islamic Revolutionary Guards Corps. U.S.-based firms volition present beryllium forbidden from shipping products to these companies without archetypal obtaining a peculiar license.

Twenty-three of the entities — successful particular, those supplying precocious chips utilized for artificial quality with adjacent ties to the Chinese subject and defence industry, and 2 Chinese companies that were recovered to beryllium supporting the Russian subject — were deed with adjacent tougher restrictions.

The companies volition beryllium taxable to what is known arsenic the overseas nonstop merchandise rule, which volition chopped them disconnected from buying products made anyplace successful the satellite with the usage of American exertion oregon software, which would encompass astir planetary exertion companies.

The medication besides said it would assistance restrictions connected immoderate companies that had successfully undergone U.S. authorities checks that ensured their products weren’t being utilized for purposes that the authorities deemed harmful to nationalist security.

As portion of the restrictions unveiled successful October, the Biden medication placed dozens of Chinese firms connected a ticker database that required them to enactment with the U.S. authorities to verify that their products were not being utilized for activities that would airs a information hazard to the United States.

A full of 25 entities completed those checks, successful practice with the Chinese government, and frankincense person been removed from the list. Nine Russian parties that were incapable to wide those checks were added to the entity list, the section said.

A spokesperson for the Commerce Department said that the actions demonstrated that the United States would support its nationalist information but besides stood acceptable to enactment successful practice with companies and big governments to guarantee compliance with U.S. export controls.

In a abstracted announcement Thursday morning, a authorities committee that oversees the audits of companies listed connected banal exchanges to support the interests of investors said that it had gained implicit entree for the archetypal clip successful its past to inspect accounting firms headquartered successful mainland China and Hong Kong.

The agency, called the Public Company Accounting Oversight Board, said this was conscionable an archetypal measurement successful ensuring that Chinese companies are harmless for U.S. investors. But the improvement marked a measurement toward a imaginable solution of a yearslong standoff betwixt the United States and China implicit fiscal checks into nationalist companies. It besides appeared to alteration the likelihood that large Chinese companies volition beryllium automatically delisted from U.S. exchanges successful the years to come.

Congress passed a instrumentality successful 2020 that would person required Chinese companies to delist from U.S. banal exchanges if U.S. regulators were not capable to inspect their audit reports for 3 consecutive years.

Erica Y. Williams, the seat of the board, said the announcement should not beryllium misconstrued arsenic a “clean measure of health” for firms successful China. Her unit had identified galore imaginable deficiencies with the firms they inspected, she said, though that was not an unexpected result successful a jurisdiction being examined for the archetypal time.

“I privation to beryllium clear: this is the opening of our enactment to inspect and analyse firms successful China, not the end,” Ms. Williams said.