Amid US Trade War, China to Ban ‘Unreliable’ Firms from Trading and Investing
New Delhi: With US-China trade tension already in the air before COVID-19 struck the global economy, protectionism is escalating matter even more. While the Donald Trump administration threatening to squeeze out Chinese business, the People’s Republic of China, too, is considering blacklisting certain foreign firms from trading or investing in the country.
According to a report in the South China Morning Post, China has released its list of “unreliable entities”, plans for which had been in place prior to May 2019.
In May 2019, Beijing had said that it would blacklist firms which did not play by the market rules, did not follow contractual obligations, impinged upon the rights of Chinese businesses or threatened China’s national security interests.
The SCMP report mentions that firms which are on the blacklist would not be either be restricted or completely disallowed to import or export goods from or to China, and from investing into the country.
It added that “corresponding action” shall be taken against firms which “harm China’s sovereignty, security and development interests, violate market rules, halt contractual obligations with Chinese companies or individuals, or take discriminatory measures on Chinese companies or individuals to severely hurt their legitimate interest”.
A separate office will reportedly be constituted to look into such cases and firms under investigation would be given the opportunity to defend themselves and given a grace period to correct their behaviour.
If a firm is indeed found flouting rules, the report says that the person behind it may lose their work and residence permits and denied access to the country. However, some offences can be compensated for with a fine.
The Chinese move comes at a time when the country is in a trade-war with the US. Its commerce ministry’s statement reiterated that it was opposed to unilateralism and protectionism and supported a multilateral trade system.
The move also comes about at a time when TikTok and WeChat, popular apps by Chinese companies, are set to be banned by the US from Sunday. The order for a ban by the US Department of Commerce came after President Trump’s executive order in August gave US business houses 45 days to cut ties with both companies behind the apps.
“At the President’s direction, we have taken significant action to combat China’s malicious collection of American citizens’ personal data, while promoting our national values, democratic rules-based norms, and aggressive enforcement of U.S. laws and regulations,” U.S. Department of Commerce Secretary Wilbur Ross said in a statement.
Urging the US to end its “bullying”, China’s Ministry of Commerce issued a statement. “China urges the US to abandon bullying, cease (its) wrongful actions and earnestly maintain fair and transparent international rules and order...If the US insists on going its own way, China will take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies,” it said.
Huawei, one of the largest telecommunication equipment manufacturers and the second-largest makers of smartphones, has already found itself in trouble in the west. The US has alleged that the Shenzhen-based company might use its equipment to spy on its nationals.
The US’ tech war against China has been ongoing for a while now. “It is a market and a technology denial regime that seeks to win back the market that the US and European countries have lost to China,” a NewsClick piece had said in August.
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