Published: Sun, June 23, 2019
Global News | By Blake Casey

U.S. Blocks More Chinese Tech Firms on National Security Concerns

U.S. Blocks More Chinese Tech Firms on National Security Concerns

China's state broadcaster, China Radio International, said in an editorial on Saturday that the move was one of a series of recent actions by the United States that violated the consensus reached by President Donald Trump and his Chinese counterpart Xi Jinping in Argentina last December.

Commerce is putting five Chinese organizations, including supercomputer maker Sugon, on its so-called Entity List, saying their activities are "contrary to the national security and foreign policy interests of the United States".

The other companies added to the list are Chengdu Haiguang Integrated Circuit, Chengdu Haiguang Microelectronics Technology, and Higon.

America is limiting big Chinese computing firms' access to U.S. tech for the super-powerful machines.

Last month, the Trump administration also blacklisted Huawei and accused the Chinese company of acting against USA interests.

This story has been published from a wire agency feed without modifications to the text. This means they can't buy US components (via CNBC). Last month, Commerce last month added telecommunications giant Huawei to it, heightening tensions with Beijing. China has retaliated with tariffs on USA products.

This is not the first time the USA has placed on the Entity List a Chinese organization involved in supercomputer development with military uses.

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In March, a U.S. government-led group said it was working with chipmaker Intel Corp (the largest supplier of data-center chips) and computer maker Cray Inc (which specialises in ultra-fast supercomputers) to develop a new technology by 2021: the country's fastest computer for conducting nuclear weapons and other research.

All of the entities will be effectively barred from obtaining USA technology after the government determined they were "acting contrary to the national security or foreign policy interests of the United States". Talks to resolve trade disputes between the two countries also broke off last month.

It is a severe step by Trump administration for Chinese companies just ahead of a high-stakes Group of 20 summit scheduled to be held on June 28 and 29 in Japan.

Trump has imposed 25% tariffs on $250 billion in Chinese imports and is preparing to target another $300 billion, extending the import taxes to virtually everything China ships to the United States.

Sugon and the Wuxi Jiangnan Institute, which the US said is owned by a Chinese army research institute, are involved in China's push to develop next-generation "exascale" high performance computing to assist with military modernization. The US is tightening its restrictions on Chinese high-tech companies, as it has done to Huawei. "However, the Chinese may see this as ill-timed bullying". It sends a signal that the Trump administration does not intend to compromise on its demands on China or accept China's attempts to renege on agreements it made in earlier negotiations.

Vice President Mike Pence also canceled a planned speech in Washington, D.C., that would have criticized China's stance on human rights.

Bajak reported from Boston.

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