Four lawmakers are urging the Biden administration to consider placing Chinese biotech company WuXi AppTec and its subsidiaries on the Commerce Department’s Entity List, the Treasury Department’s Non-Specially Designated Nationals Chinese Military-Industrial Complex Companies List and the Defense Department’s Chinese Military Companies List. They said the firm has close ties to the People’s Liberation Army (PLA) and the Chinese Communist Party (CCP) and has been involved in perpetrating the CCP's human rights violations.
Exports to China
Policy experts and former government officials speaking on a panel this week mostly agreed that the U.S. should impose sectoral-based outbound investment restrictions on China rather than individual investment sanctions on specific entities, saying a sector approach would be much simpler and more effective. And although some companies say it will be too challenging to comply with a broad investment ban on sensitive Chinese technology sectors, one expert said it will be easier than the financial industry is letting on.
Hesai Technology, the largest Chinese lidar company by sales, plans to sue the Pentagon for adding it to a list of companies with ties to China’s military (see 2402010018), the company announced Feb. 8. Hesai was added to the list “without any explanation or justification,” CEO Yifan Li said, calling the U.S. decision “unjust, capricious, and meritless.”
DOJ this week announced charges involving two illegal technology transfer schemes, which were meant to benefit the Chinese and Iranian governments.
An investigation by the House Select Committee on China found that five U.S. venture capital firms have invested more than $3 billion in Chinese technology companies, many of which aid China’s military, surveillance apparatus and human rights violations, the committee said on Feb. 8.
The Treasury Department is likely to release its draft outbound investment regulations in the next several months, setting them up to potentially take effect before year's end, said foreign investment lawyer Jonathan Gafni of Linklaters.
The U.S. and other governments have so far placed export controls only on advanced semiconductors because they may believe restrictions on a broader, more mature set of chips won’t be effective, experts said this week.
Beijing recently warned Japan not to take any moves that could disrupt supply chains with China following reports that Tokyo could soon tighten its restrictions on certain technology exports.
Technology companies, trade groups, think tanks and researchers urged the government to be cautious as it evaluates its semiconductor-related export controls and prepares new ones, warning that misguided restrictions could cede American technology leadership to China, hurt the competitiveness of U.S. companies and raise the complexity of an already fraught compliance landscape.
The U.S. charged four Chinese nationals this week for their parts in a yearslong conspiracy to violate export controls by smuggling electronic parts through China and to Iran.