The United States blacklisted seven Chinese supercomputing companies this week for allegedly conducting activities contrary to U.S. national security or foreign policy, contending that they are assisting the People’s Liberation Army with a variety of activities, including China’s weapons of mass destruction efforts.
The Commerce Department announced that the Bureau of Industry and Security had placed the seven Chinese companies on the U.S. Entity List. The U.S. says that the companies (Tianjin Phytium Information Technology, Shanghai High-Performance Integrated Circuit Design Center, Sunway Microelectronics, the National Supercomputing Center Jinan, the National Supercomputing Center Shenzhen, the National Supercomputing Center Wuxi, and the National Supercomputing Center Zhengzhou) are “involved with building supercomputers used by China’s military actors, its destabilizing military modernization efforts, and/or weapons of mass destruction programs.”
Commerce Secretary Gina Raimondo, who was pressed during her Senate confirmation process about her unwillingness to guarantee that Chinese telecom giant Huawei would not be removed from the U.S. blacklist, said: “Supercomputing capabilities are vital for the development of many, perhaps almost all, modern weapons and national security systems, such as nuclear weapons and hypersonic weapons. The Department of Commerce will use the full extent of its authorities to prevent China from leveraging U.S. technologies to support these destabilizing military modernization efforts.”
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The Commerce Department said the supercomputing companies met the criteria for the blacklist under the Export Administration Regulations. The Entity List is a tool used “to restrict the export, re-export, and in-country transfer of items … reasonably believed to be involved, have been involved, or pose a significant risk of being or becoming involved, in activities contrary to the national security or foreign policy interests of the United States.” The End-User Review Committee, made up of members from the Commerce, State, Defense, Energy, and, sometimes, Treasury departments, is in charge of adding groups to the blacklist.
The notice on the Federal Register said the committee “determined that the conduct of the above-described seven entities raises sufficient concerns that prior review, via the imposition of a license requirement, of exports, reexports, or transfers (in-country) of all items subject to the Export Administration Regulations involving these seven entities and the possible issuance of license denials or the possible imposition of license conditions on shipments to these entities, will enhance BIS’s ability to prevent violations of the EAR or otherwise protect U.S. national security or foreign policy interests.”
Chinese Foreign Ministry spokesman Lijian Zhao on Friday said: “We firmly reject the U.S. move to add 7 Chinese supercomputing entities to the Entity List to maintain monopoly and hegemony in S&T [science and technology] sector by abusing national security&state power. Despite blockade, China’s supercomputing is leading the world. The U.S. can’t contain our S&T progress.”
In December, the Trump administration’s Commerce Department added a number of Chinese companies to the blacklist, including Semiconductor Manufacturing International Corporation and Chinese drone-maker DJI Technology. The chipmaker and 10 of its affiliated entities were added “as a result of China’s military-civil fusion doctrine and evidence of activities between SMIC and entities of concern in the Chinese military industrial complex.” And the drone company, among others, was blacklisted because it had “enabled wide-scale human rights abuses within China through abusive genetic collection and analysis or high-technology surveillance, and/or facilitated the export of items by China that aid repressive regimes around the world, contrary to U.S. foreign policy interests.”
During a White House press conference this week related to President Joe Biden’s infrastructure proposal, Raimondo was asked about the status of the administration’s China technology policy review, and she said, “We need to play offense and defense. The jobs package is offense: Invest in America competitiveness so we can play offense. A lot of the tools that Commerce has are defense: the entities list, tariffs, et cetera. So we are, you know, led by Jake Sullivan and our team, interagency review, we’re in the process of doing it now. A lot of people have said, ‘Is Huawei going to stay on the Entity List?’ I have no reason to believe that they won’t, but we’re kind of in the middle of the overall review of China policy.”
Raimondo added of the China review: “I would say we’re in the thick of it right now. Like, we’re working as aggressively as we can.” She later said that “China’s actions are uncompetitive, coercive, underhanded. They’ve proven they’ll do whatever it takes. And so I plan to use all the tools in my toolbox, as aggressively as possible, to protect American workers and businesses from unfair Chinese practices.”
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Some Republican senators voted against confirming Raimondo because she declined to promise to keep Huawei on the blacklist, though she did testify that she would use the “full toolkit at my disposal to the fullest extent possible to protect Americans and our network from Chinese interference or any kind of backdoor influence into our network.”
The Justice Department unveiled a superseding indictment of previous 2019 charges against Huawei in February 2020, charging it with racketeering and conspiracy to steal trade secrets. The 16-count indictment charged Huawei and its U.S.-based subsidiaries with conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act and outlined Huawei’s deceptive efforts to evade U.S., European Union, and United Nations sanctions when doing business in North Korea and Iran.
The Federal Communications Commission concluded in March that five Chinese telecommunications companies, including Huawei, pose a risk to U.S. national security, a significant move early in the Biden administration after the Trump administration’s all-out effort to limit the Chinese tech company’s reach in the U.S. and abroad.
