US singles out Chinese companies for helping Beijing's military

The Pentagon added more than a dozen Chinese companies to a blacklist created by the Defense Department to highlight firms it says are allegedly working with Beijing's military, as part of the broader effort to keep American technology from aiding China.

New additions to the list, first reported by Reuters, were posted to the Department of Defense website Wednesday and include memory chip maker YMTC, artificial intelligence company Megvii, lidar maker Hesai Technology and tech company NetPosa.

Amid strained ties between the world's two biggest economies, the updated list is one of numerous actions Washington has taken in recent years to highlight and restrict Chinese companies that it says may strengthen Beijing's military.

A spokesperson for the Chinese embassy in Washington said China opposed the move and called it an abuse of state power, adding that it ran counter to the US's "alleged commitment to market competition and international fair trade."

YMTC, Megvii and Hesai did not immediately respond to requests for comment.

While being placed on the list doesn't involve immediate bans, it can be a blow to designated companies' reputations and represents a stark warning to US entities and companies about the risks of conducting business with them. It could also add pressure on the Treasury Department to sanction the companies.

In addition, the National Defense Authorization Act for Fiscal Year 2024 added some teeth to the "Section 1260H" list, prohibiting the Defense Department under Section 805 of the law in coming years from contracting with any of the designated companies.

"The Defense Department's updated 1260H list underscores China's unwavering commitment to its military-civil fusion strategy," said Craig Singleton, a senior fellow at the Foundation for Defense of Democracies.

"Being listed on 1260H poses major reputational risks to Chinese companies," he added, noting that some Chinese firms have tried to get themselves removed from the list.

Other firms added on Wednesday include China Three Gorges, China Construction Technology and Yitu Technology, as well as publicly traded companies Chengdu JOUAV Automation Tech, Chengdu M&S Electronics Technology, Guizhou Aviation Technical Development, and ShenZhen Consys Science & Technology.

They join previously listed aviation company AVIC, BGI Genomics, China Mobile, energy company CNOOC, and China Railway Construction.

Separately on Wednesday, senior US officials, including FBI Director Christopher Wray, warned that hackers linked to China's government are preparing to cause "real-world harm" by targeting critical US infrastructure, such as water treatment plants, the electric grid, oil and natural gas pipelines, and transportation hubs.

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