US sanctions on China will continue but Beijing ‘unlikely to escalate’ amid decoupling fears

The Biden administration sanctioned 23 more Chinese entities for suspected Xinjiang abuses, military and business ties last week

Experts say Beijing will be cautious about retaliating under its new anti-sanction law as it is reluctant to encourage technology decoupling

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The Biden administration added more Chinese companies to its entity list over alleged human rights abuses in Xinjiang last week. Photo: AFP

Published: 10:30pm, 12 Jul 2021Updated: 11:54pm, 12 Jul 2021

China is prepared for more sanctions after the US added 23 Chinese entities to its export blacklist last week, but Beijing will be cautious in responding given its reluctance to encourage full-scale technology decoupling, Chinese experts and government advisers say.

The Biden administration’s latest action follows the addition of a handful of Chinese polysilicon producers to its “entity list” last month as part of efforts to hold China accountable for alleged human rights abuses in Xinjiang Uygur autonomous region.

Beijing vigorously denies rights abuses in the far western region and views Washington’s sanctions blitz as part of an effort to contain China’s technological development and growing power.

The 22 companies and one individual sanctioned last Friday are mostly involved with artificial intelligence and security products. Fourteen were sanctioned over alleged rights abuses in Xinjiang, five for ties to the Chinese military, and another four for doing business with firms that had already been sanctioned by the US.

Five of them – Armyfly, Leon Technology, Suzhou Keda Technology, Wuhan Raycus Fiber Laser Technologies and Xinjiang Sailing Information Technology – are listed or subsidiaries of listed companies in China.

“The US is the only country in the world that targets specific companies in terms of technology decoupling,” said Shi Yinhong, an adviser to the State Council and a professor of international relations at Renmin University.

“The number of Chinese companies sanctioned by the US from the late Trump administration until now is already quite high.”