On Feb. 7, the US Department of Commerce‘s Bureau of Industry and Security (BIS) issued a statement adding 33 Chinese companies to the Unverified List (UVL). Listing does not imply that said companies pose a specific and clear national security threat or foreign policy concern, but US companies are required to perform additional due diligence requirements, including providing additional documentation when doing business with them.
Mathew Axelrod, assistant secretary of the Department of Export Enforcement, said in a statement, “The ability to verify the legitimacy and reliability of foreign parties receiving U.S. exports through the timely completion of end-use controls is a core principle of our export control system.” He added that the inclusion of 33 parties in the People’s Republic of China in the Unverified List “assists U.S. exporters in conducting due diligence and assesses transaction risks, and the PRC government recognizes the importance of their cooperation in planning.” of end-use controls”. .
As part of the restrictions, the Commerce Department is telling US exporters that they now need a license if they want to ship products to any of the companies on the list. It informs the flagged businesses that in order to continue receiving shipments, they must confirm that they are legitimate and willing to comply with US regulations. The initiative is also intended to inform China that if the companies are to be delisted, they must allow US controls and inspections.
The addition of the 33 Chinese companies brings the total number of listed companies to about 175. In addition, there are several Chinese companies designated by the Ministry of Commerce, including those on the Entity List and the Military End User List to stand.
While most of the 33 Chinese companies are in the electronics business, they also include optics companies, a turbine blade company, government university laboratories and other companies. The 33 companies are listed as follows:
AECC South Industry Co., Ltd., Beijing SWT Science, Beijing Zhonghehangxun Technology Co., Ltd., China National Erzhong Group Deyang Wanhang Die Forging Co., Ltd., Chuzhou HKC Optoelectronics Technology Co., Ltd., Dongguan Durun Optical Technology Co., Ltd., Dongguan Huiqun Electronic Co., Ltd., Guangdong Guanghua Sci-Tech Co., Guangxi Intai Technology Co., Ltd., Guangzhou Hymson Laser Technology Co., Ltd., Harbin Xinguang Feitian, Hefei Anxin Reed Precision Co., Ltd., Heshan Deren Electronic Technology Co., Ltd., Hubei Longchang Optical Co., Ltd., Hubei Sinophorus Electronic Materials Co., Ltd., Hunan University, Jinan Bodor CNC Machine Co., Ltd., Jiutian Intelligent Equipment Co., Ltd., Kunshan Heng Rui Cheng Industrial Technology Co., Ltd., Shanghai Fansheng Optoelectronic Science & Technology Co., Ltd., Shanghai Micro Electronics Equipment (Group) Co., Ltd., Shuang Xiang (Fujian) Electronics , Southern University of Science and Technology, Suzhou Chaowei Jingna Optoelectric Co., Ltd . , Suzhou Gyz Electronic Technology Co., Ltd., Suzhou Lylap Mold Technology Co., Ltd., Wuxi Biologics Co., Ltd., Wuxi Biologics (Shanghai) Co., Ltd., Wuxi Turbine Blade Co., Ltd., Yunan Fs Optics Co., Ltd., Yunnan Tianhe Optoelectronic Co., Ltd., Zhengzhou Baiwei Intelligent Automation, Zhuzhou CRRC Special Equipment Technology Co.
It should be noted that the sanctioned Shanghai Micro Electronics Equipment Group (SMEE) mainly specializes in semiconductor equipment, pan-semiconductor equipment, high-end intelligent equipment development, design, manufacturing, sales and technical services. The company’s equipment is widely used in integrated circuit front end, advanced packages, FPD panels, MEMS, LEDs, power devices and others. According to ANBOUND researchers, SMEE does not have the fastest process in lithography, and its lithography level is around 90nm accelerate.
In view of the US sanctions, the researchers from ANBOUND would like to point out a few points in particular:
First, the US state apparatus is already in constant use against China in the fields of science, technology and industry. This sanctions regime, based on the legal and political game within the US, will show greater inertia than changes in the geopolitical environment and will be difficult to stop once it starts. Simply put, as the US decides to impose sanctions on Chinese companies through legislation and congressional votes, even if US-China diplomatic relations improve in the future, it will be difficult for the US to stop or lift sanctions on Chinese companies should.
Second, US sanctions against China’s science and technology and economic sectors are based on expert research, not politicians’ decisions. Judging by the benefits of the sanctioned companies, the relevant “strikes” are concentrated on the most important industrial or technological links, which is a relatively “precise” strike against China’s incomplete industrial and technological chain, which will constitute a systematic suppression of China’s development the relevant scientific and technological industrial sectors.
Third, regarding US science and technology sanctions, China needs to make long-term preparations and establish fundamental thinking. According to ANBOUND team’s long-term pursuit, Chinese industry and some government agencies are adopting a risk-free and practical approach in many key industries and technology areas that may be restricted by the United States, when the necessary equipment, materials or technology could still be purchased through import channels the relevant industry is more willing to buy than to research itself and cannot decide on a localization. In this case, if the US is determined to increase restrictions in the short term, the country may not do well in many areas of science and technology. Chinese companies are likely to do more if forced to put up a last stand.
Fourth, China must argue openly and cooperatively in the face of US sanctions. The insistence on openness and cooperation does not contradict the basic idea of establishing independent innovations. Using the example of semiconductors, it has been analyzed several times in the past that the semiconductor industry is a highly globalized industrial chain, even the United States is unable to achieve the development of the entire semiconductor industry chain. This means that it is impossible for China to achieve independent control over the entire semiconductor industry chain. To this end, China should, on the one hand, increase the degree of autonomy in key areas of research and development, technology and supply chain; On the other hand, they cling to the world of openness and collaboration that makes it impossible for the US to completely cut off the highly globalized semiconductor industry chain.
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