US to add more Chinese tech firms to investment, export blacklists

By Reuters Time of article published Dec 15, 2021

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Shares in Chinese health care and technology firms tumbled on Wednesday after a report that the US would add more Chinese firms, including the largest commercial drone maker and biotech firms, to investment and export blacklists this week.

Citing two sources briefed on the plans, the Financial Times said the US would add eight Chinese firms, including the drone maker, DJI Technology Co Ltd, to an investment blacklist on Thursday.

The US commerce department is also set to place more than two dozen Chinese firms, some of them involved in biotechnology, on an “entity list” restricting exports to them by US firms, the newspaper cited the sources as saying.

The report hastened a sell-off in Chinese healthcare shares in afternoon trade, knocking 3.2% off a mainland index tracking the sector against a drop of 0.87% in the broader index.

The impact was sharper still in Hong Kong, where the Hang Seng Healthcare Index was down 7.6% in late afternoon trade.

Healthcare firms were already under pressure on Wednesday after Chinese biotech company BeiGene Ltd plunged on its Shanghai debut, amid worries that some Chinese firms could be ordered to delist from the US stock market.

The Financial Times said the US treasury department would put eight companies including DJI on its “Chinese military-industrial complex companies” blacklist because of their alleged involvement in surveillance of the Uyghur Muslim minority.

US investors are barred from taking stakes in companies on the list, which now comprises about 60 firms.

A DJI spokesperson declined to comment on the report, but directed Reuters to the company’s statement when US commerce department put it it on the “Entity List” a year ago for the same reasons.

That step barred it from buying or using US technology or components.

At the time, DJI said it had done nothing to justify the move and would continue to sell products in the US, where it has built up a large market.

The US Treasury did not immediately respond to a Reuters request for comment.

In Beijing, responding to questions on the FT report, foreign ministry spokesman Zhao Lijian told a news briefing China was opposed to US “suppression” of its companies and would pay close attention to how the situation developed.

The new additions come just days after artificial intelligence start-up SenseTime Group was added to the Treasury list, forcing it to postpone its $767-million Hong Kong initial public offering (IPO).

SenseTime said the accusations against it were unfounded.

According to recent media reports the blacklist is related to a claim that Muslim minorities have been detained in recent years in a vast system of camps in China's far western region of Xinjiang.

Some foreign lawmakers and parliaments have labelled the treatment of Uyghurs as genocide, citing evidence of forced sterilisations and deaths inside the camps.

China denies this, saying Uyghur population growth exceeds the national average.

Other companies to be added to the list, the FT said, are image-recognition software firm Megvii, supercomputer maker Dawning Information Industry, facial recognition specialist CloudWalk Technology, cyber security group Xiamen Meiya Pico, artificial intelligence company Yitu Technology and cloud computing firms Leon Technology and NetPosa Technologies.


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