US-China tech war: Washington’s latest unverified list hits at the most vulnerable parts of China’s technology supply chain

The US added 33 Chinese entities, mostly hi-tech manufacturers to its unverified list (UVL) last week, citing the inability to verify their ownership

The UVL differs from the better-known Entity List, which restricts access to US exports unless the exporter secures a license

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A man visits a display of semiconductor devices at Semicon China, a trade fair for semiconductor technology, in Shanghai on March 17, 2021. Photo: Reuters

Published: 1:00pm, 13 Feb 2022Updated: 3:04pm, 13 Feb 2022

The United States government set off alarms in Beijing with last week’s addition of Chinese entities to an export watch list, as the move tightened the stranglehold on China’s technological supply chain by hitting at its most vulnerable parts.

The US Commerce Department added 33 Chinese entities, mostly hi-tech manufacturers, including those that produce laser components and pharmaceuticals, government research labs and two universities to its unverified list (UVL), citing the inability to verify their end users. Chinese companies on the list must supply additional documents and be subject to other checks to deal with US suppliers.

The move has “created new shocks to the stability of the supply chain,” said Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce.

The list would create a wedge in the cooperation between China and the US, as it will “adversely affect future international economic cooperation and harm the interests of all parties,” he said.

The UVL, one of several lists published by the US Commerce Department, differs from the better-known Entity List, which restricts access to US exports unless the exporter secures a license. Semiconductor Manufacturing International Corp. (SMIC), China’s largest chip maker, and the country’s largest telecommunications infrastructure builder Huawei Technologies are among 300 Chinese companies on that Entity List.

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