Chinese companies

Though Joe Biden won the last presidential election in the US, Trump is not making his departure easy on China. From last year especially with the breakout of COVID-19, the US government has taken many harsh decisions against China. First, it started with Trump accusing China of the breakout of the novel coronavirus which was followed by attacking their trade relation. Trump issued the ban of TikTok and similar apps from the US and recently he barred any US transaction using Alipay and 8 other Chinese apps. Last weekend, which was the last week for Trump in the White House, he blacklisted Xiaomi and 8 eight Chinese companies in the US.

The US government blacklisted these nine companies due to alleged military links which also include Commercial Aircraft of China and one of the largest Chinese oil companies. Blacklisting these companies also put the US investors in a big dilemma who put their money in these Chinese companies.

Xiaomi on defense statement

Banning Xiaomi from the US will affect both the company and its stakeholders. After Trump and his government decided to blacklist these nine Chinese companies, Xiaomi put out a statement on Twitter that they are “not owned, controlled, or affiliated” in any way to the Chinese military. The company further mentioned that they will take proper action in the best interest of its stakeholders. Xiaomi is a very popular company for its smartphones and has a market across 90 countries so far. Last year, the company even outrun Apple in terms of selling smartphones in the third quarter. Even in the pandemic, the company has made huge sales as it rose to CNY 53.54billion in the second quarter of 2020.

The question is how the citizens of the US will respond to this since Trump lost the last election to Biden. There has been a huge tension growing between Beijing and the White House putting giant tech companies and their stakeholders in the crosshair. Though Biden didn’t make any comments even when transactions with Alipay and other Chinese companies were banned last month, people are curious to see how Biden responded to this Sino-US tension.

Blacklisting China National Offshore Oil Corp

CNOOC is one of the other 8 Chinese companies that the Commerce Department has but in the entity list. Being added to the entity list means the US firms are now barred from trading with these companies. The US firms don’t have the permission to transfer technology without any further notice or grant from the US government. Under Trump’s administration, the list seems neverending as every month we find banning of some other Chinese companies on the news headlines.

According to Gadgets 360, CNOOC has been involved in many activities having connections to the disrupted waters of the South China Sea. CNOOC carried out offshore drilling operations in this region which confirms the soring relationship between Beijing and other nations like Vietnam, the Philippines, Taiwan, etc. This proves that not only the Sino-US relation is under a lot of stress but also many Asian countries have an objection to China’s territorial claims. A few months ago, tension escalated between India and China due to the dispute in LAC. US thinks that these reckless actions of China for militarisation will have an impact on the US’s national security as well.

China’s militarization efforts

Responding to the territorial claims of China and actions in the South China Sea, US Commerce Secretary, Wilbur Ross, commented that China’s rigorous attempts to acquire “sensitive intellectual property and technology” possess a threat to the national security of the US as well as the international community. He further adds that CNOOC acts like a bully trying to intimidate the neighboring nations of China so that the Chinese military “continues to benefit from government civil-military fusion policies” with evil motives.CNOOC denied commenting at the moment. Skyrizon, another Chinese company in aerospace technology has also been blacklisted.

Both China and the US are very powerful nations that now seem to stop at nothing. Over the past year, many decisions to suppress the influence of Chinese companies in the US have been taken which will affect the economy of China. But, if China retaliates and the stakes are high, both nations will shift from multilateralism to bilateralism. It will become the competition of power and the collateral damage will become unfathomable.