US slaps export controls on dozens of Chinese firms over ‘threat to national security’ as trade tensions escalate

Washington has slapped restrictions on dozens of key Chinese companies – including state-owned developers of military-use technologies such as air defence and satellite systems – for reasons of national security.

The US Department of Commerce added 44 Chinese entities to its export control list on Wednesday for posing a “significant risk” to US national security or foreign policy interests in the midst of the heated trade spat between the world’s two largest economies.

In a direct challenge to China’s ambitions to become a technological superpower, driven by the Made in China 2025 policy, the new restrictions target some of the key elements of the policy including air defence systems, satellite communications systems, semiconductors and aerospace products.

Among the eight companies and dozens of their subsidiaries to be affected were the China Aerospace Science and Industry Corporation Second Academy – a research unit of the largest missile systems developer in China – and communications system manufacturer Hebei Far East Communication System Engineering.

Other research institutes under the state-owned technological giant China Electronics Technology Group Corporation (CETC) developing semiconductors, radar technology and microelectronic devices were also affected.

Others on the list included China Volant Industry, which exports and imports aerospace technologies, and China Hi-Tech Industry Import and Export Corporation.

The US controls will limit that companies’ access to products that the US commerce department deems could have dual military or civilian use and may deny them key components such as nuclear materials, telecoms equipment, lasers and sensors.

Markets reacted on Thursday, sending share prices for businesses related to those on the export control list spinning downwards.