The Commerce Department should add more Chinese companies to the Entity List, better restrict China’s government organizations and target the country with unilateral controls when appropriate, China Tech Threat said this week. The organization, which is run by Strand Consult and advocates for stronger export controls on China, said Commerce should add China semiconductor companies Yangtze Memory Technologies and Changxin Memory Technologies to the Entity List and tailor export controls to better target Chinese “pseudo-government organizations.” Commerce should also “prioritize” unilateral controls on American semiconductor manufacturing equipment by employing a “control-now-cooperate-later” approach, China Tech Threat said.
Exports to China
Although the Commerce and State departments have been able to conduct some export end-use checks during the COVID-19 pandemic, officials said both agencies continue to face challenges scheduling on-site inspections.
The European Commission announced plans this week to increase investments and incentives for its semiconductor industry and establish a more reliable chip supply chain to reduce dependence on foreign suppliers. The plans also could lead to more export control measures over sensitive chip products in response to domestic shortages or unfair foreign trade policies.
China objected to the U.S. decision to add 33 Chinese entities to its Unverified List, it said in a Feb. 7 news release. The Bureau of Industry and Security made the additions, which included universities and companies operating in China's technology and electronics sectors, due to its inability to verify the reliability of the entities through end-use checks (see 2202070012). According to an unofficial translation, China's Ministry of Commerce said that the U.S. should immediately correct its perceived wrongdoing and return to mutual beneficial cooperation. MofCom characterized this action, along with the U.S. past export control moves, as tools of "political suppression and economic bullying." A BIS spokesperson dubbed its end-use checks a "core principle" of the agency's export control system.
WuXi Biologics, one of China’s largest biotechnology companies, said it complies with all U.S. export control regulations despite the Commerce Department’s decision to add two of its subsidiaries to the Unverified List this week (see 2202070012). The company said it has been approved to import U.S. export-controlled “hardware controllers for bioreactors and certain hollow fiber filters” for 10 years. “We do not re-export or resell these items to any other entity,” WuXi said Feb. 8 in a statement.
The Bureau of Industry and Security added 33 Chinese entities to its Unverified List this week, including universities and companies operating in China's technology and electronics sectors. BIS hasn’t been able to verify the “legitimacy and reliability” of the entities through end-use checks, including their ability to responsibly receive controlled U.S. exports, the agency said in a notice. The UVL additions take effect Feb. 8
The House voted 222-210 last week to pass its China competition bill, which includes a variety of provisions that could expand U.S. export controls, sanctions and investment screening authorities. Although the America Competes Act faced objections from Republicans who argued it wasn’t tough enough on China and didn’t include strong enough export control measures (see 2202020039), several provisions could lead to more China sanctions and further restrict exports of critical American technologies.
The Bureau of Industry and Security will add 33 Chinese entities to its Unverified List this week, including a range of companies operating in China's technology and electronics sectors, it said in a notice released Feb. 7. BIS said it hasn’t been able to verify the “legitimacy and reliability” of the entities through end-use checks, including their ability to responsibly receive controlled U.S. exports. All export license exceptions involving those parties will be suspended, and exporters must obtain a statement from any party listed on the UVL before proceeding with certain exports.
The House will consider multiple sanctions and export control amendments submitted as part of its China competition bill (see 2201310064), including one that could adjust the Commerce Department's export control authority, several that could require more scrutiny on Chinese foreign investments and at least two that could lead to new China sanctions.
Two senators this week asked the Commerce Department to say whether it opposes stronger export controls against SMIC, China’s top chipmaker, as has been reported in the media, and to explain why.