US Imposes Export Controls on Chinese Tech Firms

Yesterday, China expressed its strong objections after the United States added numerous companies to its export control list. This list includes over 50 firms located in China, which the U.S. alleges have sought advanced knowledge in areas like supercomputing, artificial intelligence, and quantum technology for military applications.

In total, this latest update features approximately 80 companies, which also encompasses businesses from Taiwan, Iran, Pakistan, South Africa, and the United Arab Emirates. Notable inclusions are six subsidiaries of the Inspur Group, China's leading provider of cloud computing and big data services, which was previously placed on the export controls list in 2023.

Among the newly listed entities is the Beijing Academy of Artificial Intelligence (BAAI), which has strongly opposed the decision. In a statement, BAAI expressed its surprise at being categorized as an entity, arguing that it is a private, non-profit scientific research institution and calling for the U.S. to reconsider what it views as an unfounded decision.

A review committee concluded that BAAI and another firm, the Beijing Innovation Wisdom Technology Co., were involved in developing significant AI models and advanced computer chips meant for military uses.

China's Foreign Ministry reacted, condemning the entity list and other export controls as an unjust attempt to suppress Chinese businesses. Spokesperson Guo Jiakun stated that these actions violate international law and the fundamental norms of international relations, damaging legitimate business interests and undermining global supply chain stability. China unequivocally opposes these measures.

The recent updates aim to curb China’s ability to acquire and grow ultra-fast supercomputers, which are crucial for the development of hypersonic weapons and other sensitive technologies. The Bureau of Industry and Security (BIS) noted that the actions also seek to prevent South Africa’s Test Flying Academy from obtaining U.S. goods to train Chinese military personnel, disrupt Iran's access to unmanned aerial vehicles and other military hardware, and impair efforts on nuclear and ballistic missile offense capabilities.

Companies listed are now subjected to the BIS's “foreign direct product rule,” which allows the U.S. to monitor re-exports and transfers of foreign-made goods that incorporate technology considered vital for national security.

This tightening of controls arrives as the Trump administration is preparing for another round of tariff hikes, following an unprecedented trade conflict initiated during Donald Trump’s first term. Current tariffs on imports of Chinese goods have reached 20%. Recently, Trump mentioned plans to impose a 25% tariff on all imports from countries buying oil or gas from Venezuela, a country significant in the context of Chinese imports.

In response, China has initiated its own countermeasures, introducing several new duties on various American products and launching an anti-monopoly investigation into Google. Additionally, China is strengthening its sanctions framework, enabling the freezing of assets belonging to companies that are subject to Chinese sanctions.

US, China, Export, Control