US adds Chinese chipmaker, oil giant to security blacklist

The US government has stepped up a feud with Beijing over security by adding China’s biggest processor chip maker and a state-owned oil giant to a blacklist that limits access to American technology and investment.

Thursday’s announcement adds to steps taken by President Donald Trump against China since losing his re-election bid November 3. Political analysts have said Trump was likely to take further action before President-elect Joe Biden takes office Jan. 20.

The Pentagon added four companies including Semiconductor Manufacturing International Corp. and China National Offshore Oil Corp. to a list of entities deemed to be part of efforts to modernize the ruling Communist Party’s military wing, the People’s Liberation Army. That raises the total number of companies on the blacklist to 35.

SMIC plays a leading role in the ruling party’s effort to reduce reliance on US and other foreign technology by creating Chinese suppliers of processor chips and other components.

China’s government has criticized such restrictions as an abuse of national security arguments to handicap fledgling Chinese competitors in technology and other fields.

That has taken on greater urgency after Washington blocked access to American chips and other technology for telecom equipment giant Huawei Technologies Ltd. and imposed curbs on other Chinese buyers. The White House also has blocked the use of US technology by global vendors to produce chips for Huawei.

CNOOC is the smallest of China’s three main state-owned oil producers.

Political analysts expect little change in policy under Biden due to widespread frustration with China’s trade and human rights records and accusations of spying and technology theft.

The 2.3 million-member PLA is one of the world’s biggest and best-armed militaries. It is spending heavily to develop nuclear submarines, stealth fighters, ballistic missiles and other advanced weapons.

The Pentagon’s first list of 20 companies deemed to be PLA-linked in June included Huawei and video surveillance provider HikVision Digital Technology Co. Both say they never have taken part in military-related research.

Also cited by the Pentagon in earlier lists are state-owned phone carriers China Telecom Corp. and China Unicom Ltd. and petrochemical, construction, aerospace, rocketry, shipbuilding and nuclear power equipment companies.