A man stands outside the headquarters building of China National Offshore Oil Corporation (CNOOC) in Beijing in 2016. (AFP photo)
The administration of US President Donald Trump is set to add China’s main chipmaker SMIC and national offshore oil and gas producer CNOOC to a blacklist of alleged Chinese military companies, Reuters reports.
Citing a document and sources, the news agency said the move curbs the Chinese companies’ access to US investors, escalating the already high tension between the world’s two economic powers.
The US and China are currently at loggerheads over a host of issues, including trade, a new security law introduced in Hong Kong, the origins and handling of the COVID-19 disease, Taiwan, and the disputed South China Sea.
In an earlier report this month, Reuters said the US Department of Defense was planning to designate four more Chinese companies allegedly owned or controlled by the Asian country’s military, bringing the total number of companies affected so far to 35.
In the meantime, Trump has recently issued an executive order which would preclude US investors from purchasing securities of the listed firms starting late next year.
Although it still remains unclear when the new tranche would be published in the Federal Register, the companies to be affected include China Construction Technology Co Ltd., China International Engineering Consulting Corp., Semiconductor Manufacturing International Corp (SMIC) and China National Offshore Oil Corp (CNOOC), according to the document and three sources.
Meanwhile, SMIC said it continued "to engage constructively and openly with the US government," asserting its products and services were solely for civilian and commercial use.
"The Company has no relationship with the Chinese military and does not manufacture for any military end-users or end-uses," it added.
The company, which relies heavily on equipment from American suppliers, was already in the US’ crosshairs. In September, the US Commerce Department notified some companies that they need to have a license before they can supply goods and services to SMIC after claiming there was an "unacceptable risk" that equipment provided could be employed for military purposes.
The new move is seen as part of a broader attempt by the US to hamper what it claims to be Beijing’s efforts to enlist companies to utilize emerging civilian technologies for military purposes.
Last week, Reuters reported the Trump administration was to declare that 89 Chinese aerospace and other firms have military ties, constraining them from buying a range of US goods and technology.