This list includes ‘entities owned by, controlled by, or affiliated with China’s govt, military, or defence industry, says the Pentagon

WASHINGTON • The Pentagon unveiled a list of companies it said are owned or controlled by China’s military, opening them to increased scrutiny in the latest spat between the world’s biggest economies.

The 20 companies included Huawei Technologies Co Ltd and Hangzhou Hikvision Digital Technology Co Ltd, as well as a number of state-run enterprises. In letters to lawmakers dated Wednesday, the Pentagon said it was providing a list of “Communist Chinese military companies operating in the US”, which was first requested in the fiscal 1999 defence policy law.

This list includes “entities owned by, controlled by, or affiliated with China’s government, military, or defence industry”, Pentagon spokesman Jonathan Hoff- man said in a statement.

“As the People’s Republic of China attempts to blur the lines between civil and military sectors, ‘knowing your supplier’ is critical”, Hoffman said. “We envision this list will be a useful tool for the US government, companies, investors, academic institutions, and like-minded partners to conduct due diligence with regard to partnerships with these entities, particularly as the list grows.”

While the move may be largely symbolic since it doesn’t confer new authorities on the president, it comes as relations between the two superpowers continue to deteriorate, and as China has emerged as a key foreign policy issue in the US election campaign. The US has threatened sanctions against China for its treatment of Muslim minorities and increased grip over Hong Kong, while Beijing has for the past year threatened to produce its own blacklist of US companies.

The US list of companies said to be affiliated with the Peoples Liberation Army (PLA) was mandated under the Defence Authorisation Act of 1999, but no administration ever put out the required report. US President Donald Trump has the authority under the International Emergency Economics Powers Act of 1977 to level financial sanctions against those companies.

China’s Foreign and Defence Ministries, as well as the State-owned Assets Supervision and Administration Commission, which oversees China’s government-run companies, didn’t immediately reply to a fax during a public holiday in the country. Huawei, which already faces a number of restrictions from the US government, also didn’t immediately reply to a request for comment.

Hikvision called the US move “baseless”, saying its ownership details have always been publicly available as a listed company and “independently operated enterprise”. It said it would continue to work with the US government “to answer questions and correct misunderstandings about the company”. The company was among a number of Chinese entities put on a blacklist last year by the Trump administration.

“Hikvision strongly opposes the decision by the US government to misapply a never-used provision of a 21-year-old law,” a company spokesperson said. “Not only is Hikvision not a ‘Chinese military company,’ Hikvision has never participated in any research and development work for military applications.”

China has long pursued a policy known as “civil-military integration” that allows enterprises from both sectors to share dual-use technologies. In some cases, the policy allows the Chinese military to access technologies that might otherwise be difficult to obtain under sanctions imposed after the 1989 Tiananmen Square massacre.

“The list put out today by the Pentagon is a start, but woefully inadequate to warn the American people about the state-owned and -directed companies that support the Chinese government and Communist Party’s activities threatening US economic and national security,” Republican Senator Marco Rubio said in a statement yesterday.

China hawks in Congress have long pushed him to direct his Treasury Secretary Steven Mnuchin to deploy sanctions against Huawei. It’s unclear, however, whether the president would be willing to take such aggressive action against some of China’s most prized business champions in an election year, as the Beijing government would likely retaliate against American companies.

Derek Scissors, a China expert at the conservative American Enterprise Institute, said it was “long overdue for the government to indicate which Chinese firms have tight links to the PLA. But if there’s no meaningful action coming with that, it would just be posturing, possibly in reaction to the Bolton book”.

In his memoir, which went on sale on Tuesday, former National Security advisor John Bolton asserted that Trump asked President Xi Jinping to bolster purchases of American agricultural products to help him win re-election in November. Trump has rejected that claim.

Here is the full list of the companies: 1. Huawei; 2. Hangzhou Hik- vision Digital; 3. Aviation Industry Corp of China; 4. China Aerospace Science and Technology Corp; 5. China Aerospace Science and Industry Corp; 6. China Electronics Technology Group Corp; 7. China South Industries Group Corp; 8. China Shipbuilding Industry Corp; 9. China State Shipbuilding Corp; 10. China North Industries Group Corp; 11. Inspur Group; 12. Aero Engine Corp of China; 13. China Railway Construction Corp; 14. CRRC Corp; 15. Panda Electronics Group; 16. Dawning Information Industry Co Ltd; 17. China Mobile Communications Group; 18. China General Nuclear Power Corp; 19. China National Nuclear Power Corp; 20. China Telecommunications Corp. — Bloomberg