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March 28, 2024

WASHINGTON — The Biden administration stepped up efforts to thwart China’s development of advanced semiconductors on Thursday, limiting access to U.S. technology to 36 other companies and organizations.

The action announced by the Commerce Department is the latest in the administration’s crackdown on China’s acquisition of technology that can be used for military purposes, and underscores how restricting the flow of technology to global competitors has become a prominent element of the joint strategy. National foreign policy.

Administration officials say China is increasingly blurring the lines between its military and civilian industries, prompting the U.S. to restrict business with Chinese companies, which could fuel Beijing’s military aggression at a time of heightened geopolitical tensions, especially over Taiwan. ambition.

In October, the U.S. government announced sweeping restrictions on semiconductor exports to China by companies in the U.S. and other countries that use U.S. technology to produce these products. It also severely restricted technology exports to Russia in response to Moscow’s invasion of Ukraine.

“Today, we are building on the actions we took in October to protect U.S. national security by severely limiting the People’s Republic of China’s ability to use artificial intelligence, advanced computing, and other powerful commercially available technologies to modernize its military and violate human rights,” said Ellen R. Alan Estevez, undersecretary of commerce for industry and security, said in a statement he was referring to the People’s Republic of China.

One of the most notable companies to be included in the list is Yangtze Memory Technology, which is said to be in talks with Apple about a possible supply of components for the iPhone 14.

Congress has been preparing legislation to prevent the U.S. government from buying or using semiconductors made by YMTC and two other Chinese chipmakers, SMIC and Changxin Memory Technology Co Ltd, because of their reported ties to Chinese national security and intelligence agencies .

The U.S. government has placed the companies on the so-called Entity List, which will severely limit their access to certain products, software and technology. The Commerce Department said the targeted companies were producers and sellers of technologies that could pose significant security risks to the United States, such as advanced chips used to power artificial intelligence and hypersonic weapons, and components of Iranian drones and ballistic missiles .

Liu Pengyu, a spokesman for the Chinese embassy in Washington, said in an emailed statement that the United States “has been extending the concept of national security, abusing export control measures, discriminatory and unfair treatment of foreign companies, politicizing economic and technological issues and weaponizing This is blatant economic coercion and bullying in the field of technology.”

“China will resolutely safeguard the legitimate rights and interests of Chinese companies and institutions,” he added.

On Monday, China formally challenged the Biden administration’s chip controls at the World Trade Organization, criticizing the restrictions as a form of “trade protectionism.”

Some companies, including YMTC and its Japanese subsidiary, were added to the list because of their significant involvement in transferring sensitive items to other companies sanctioned by the U.S. government, including Huawei Technologies and Hikvision, the U.S. government said. risk.

Another entity, Tianjin Tiandi Weiye Technology Co. Ltd., is on the list for assisting China in repression and surveillance of Uyghurs and other Muslim minorities in China’s Xinjiang region, as well as supplying U.S. products to Iran’s Islamic Revolutionary Organization, the Commerce Department said. guard. U.S. companies will now be prohibited from shipping products to these companies without first obtaining special permission.

Twenty-three of those entities — notably those with close ties to the Chinese military and defense industry that supply advanced chips for artificial intelligence, as well as two Chinese companies found to support the Russian military — were subject to stricter scrutiny limit.

The companies would be subject to so-called foreign direct product rules, which would prevent them from buying products made anywhere in the world using U.S. technology or software, and that includes most global tech companies.

The administration also said it would lift restrictions on some companies that successfully pass U.S. government inspections to ensure their products are not being used for purposes the government deems a danger to national security.

As part of the restrictions announced in October, the Biden administration placed dozens of Chinese companies on a watch list, requiring them to cooperate with the U.S. government to verify that their products are not being used in activities that could pose a security risk to the United States.

A total of 25 entities completed these inspections in cooperation with the Chinese government and were therefore removed from the list. Nine Russian parties that were unable to clear the checks were added to the entity list, the department said.

A Commerce Department spokesman said the actions demonstrate that the United States will defend national security but also stands ready to work with businesses and host governments to ensure compliance with U.S. export controls.

In a separate announcement on Thursday morning, a government committee tasked with overseeing audits of companies listed on stock exchanges to protect investors’ interests said it had been granted an audit of accounting firms based in mainland China and Hong Kong for the first time in its history. Fully inspected permissions. hole.

The agency, the Public Company Accounting Oversight Board, said it was just the first step in making sure Chinese companies were safe for U.S. investors. But the development marks a possible resolution of a years-long standoff between the U.S. and China over financial checks on listed companies. It also appears to reduce the likelihood of large Chinese companies being automatically delisted from U.S. exchanges in the coming years.

Congress passed a law in 2020 that would require Chinese companies to delist from U.S. stock exchanges if U.S. regulators were unable to check their audit reports for three consecutive years.

Erica Y. Williams, chairman of the board, said the announcement should not be misinterpreted as a “certificate of health” for Chinese companies. She said her staff found many potential flaws in the companies they inspected, though that was not an unexpected finding for a jurisdiction inspected for the first time.

“I want to be clear: this is the beginning, not the end, of our work to inspect and investigate Chinese companies,” Ms Williams said.



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