U.S. puts Chinese firms helping military on trade blacklist By Reuters

© Reuters. FILE PHOTO: Chinese and U.S. flags flutter outside a company building in Shanghai, China November 16, 2021. REUTERS/Aly Song

WASHINGTON (Reuters) -The U.S. Commerce Department put a dozen Chinese companies on its trade blacklist on Wednesday citing national security concerns and in some cases their help with the Chinese military's quantum computing efforts.

The department also said 16 entities and individuals from China and Pakistan were added to the blacklist for contributing to Pakistan's nuclear activities or ballistic missile program.

In total, 27 new entities were added to the list from China, Japan, Pakistan, and Singapore.

The latest U.S. action on Chinese companies comes amid growing tensions between Beijing and Washington over the status of Taiwan and trade tensions.

Commerce Secretary Gina Raimondo said in a statement that the move will help prevent U.S. technology from supporting the development of Chinese and Russian "military advancement and activities of non-proliferation concern like Pakistan's unsafeguarded nuclear activities or ballistic missile program".

The Commerce Department said Hangzhou Zhongke Microelectronics Co. Ltd, Hunan Goke Microelectronics, New H3C Semiconductor Technologies Co Ltd, Xi'an Aerospace Huaxun Technology, and Yunchip Microelectronics were placed on the Commerce Department's entity list for their "support of the military modernization of the People's Liberation Army".

It also added Hefei National Laboratory (NYSE:LH) for Physical Sciences at Microscale, QuantumCTek, and Shanghai QuantumCTeck Co Ltd to the list for "acquiring and attempting to acquire U.S.-origin items in support of military applications".

The eight Chinese firms were added to prevent U.S. technology being used to help China develop quantum computing applications for its military.

The Commerce Department wants to stop the Chinese military from developing its counter stealth technology, which could include equipment like advanced radars, and counter-submarine applications such as undersea sensors. The action also blocks U.S. material from being used to help China break encryption or develop unbreakable encryption, the Commerce Department said.

Suppliers to the listed companies will need to apply for a license before selling to them, which is likely to be denied.

Separately, the Moscow Institute of Physics and Technology was added to the Commerce Department's military end user list, but did not provide additional information other than it had produced military products.

The entity list was increasingly used for national security and foreign policy aims during the Trump administration. Chinese telecom company Huawei was added in 2019, cutting it off from some key U.S. suppliers and making it difficult for them to produce mobile handsets.

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