China Hits Back at US Tech Sanctions   06/22 06:20

   China on Monday announced sanctions on 10 American military-related 
companies in response to a recent U.S. move that bars some leading Chinese tech 
companies from defense contracts.

   BEIJING (AP) -- China on Monday announced sanctions on 10 American 
military-related companies in response to a recent U.S. move that bars some 
leading Chinese tech companies from defense contracts.

   The Commerce Ministry said that Chinese companies would be blocked from 
exporting "dual-use" items to the 10 companies, which include military drone 
makers and some involved in rare earth mining. Dual use refers to goods that 
can have military as well as non-military applications.

   The ministry said the export ban was both to safeguard China's national 
security and in response to what it called the U.S. government's "wrongful 
expansion of its so-called List of Chinese Military Companies."

   George Chen, partner for Greater China at the advisory firm The Asia Group, 
said the ban was an unsurprising and proportionate response to the U.S. 
restrictions.

   "Most of them are U.S. defense industry players or they have close 
connections with the U.S. government for contracts and other reasons," he said. 
"Those companies are not going to do business in China, so the impact will be 
quite symbolic."

   Separately, the Finance Ministry said that government entities would be 
prohibited from buying products from 46 American companies including multiple 
units of Lockheed Martin, Raytheon and General Dynamics. A brief statement did 
not give any reason for the prohibition.

   Earlier this month, the U.S. Defense Department added several tech companies 
including Alibaba and Baidu to its list of firms that it says have links to the 
Chinese military. Baidu said the suggestion that it is a military company is 
"totally baseless."

   The designation prevents them from getting U.S. military contracts.

   The Commerce Ministry said at the time that the American sanctions run 
counter to the consensus that Chinese leader Xi Jinping and U.S. President 
Donald Trump reached during Trump's visit to China in May.

   In Monday's announcement, the ministry said that companies or individuals in 
third countries are prohibited from transferring dual-use items from China to 
the sanctioned American firms. It also said that Chinese companies could apply 
for export approval for goods that are "genuinely necessary."

   The 10 companies are AVEOX in Simi Valley, California; Red Cat Holdings and 
Teal Drones, both in South Salt Lake, Utah; IMSAR in Springville, Utah; Jaia 
Robotics in Bristol, Rhode Island; Ball Aerospace & Technologies in Broomfield, 
Colorado; Oshkosh Defense in Oshkosh, Wisconsin; L3Harris Maritime Services in 
Norfolk, Virginia; MP Materials in Las Vegas; and USA Rare Earth in Stillwater, 
Oklahoma.