Chinese leaders debate whether to speed up blacklist of US companies – report
Read full post at forexlive.com
Cisco likely to be on the list
The WSJ reports that Beijing is speeding development of a blacklist that could be used to target US technology firms but there is an internal debate about whether or not to release it ahead of the US election.
The development of a blacklist was first announced in May 2019 as the Huawei saga kicked up but it faded from memory after the Phase 1 trade deal.
In recent weeks, according to people with knowledge of the matter, an
interagency group led by Vice Premier Hu Chunhua, who oversees foreign
investment and trade, has stepped up finalization of the
“unreliable-entity” list-China’s answer to the U.S.’s list of Chinese
entities it is targeting for sanctions.China’s Commerce Ministry gave more details Saturday indicating
a list was near completion, saying blacklisted companies and
individuals would be banned from both selling to and buying from China,
and from investing in the country. However, it again refrained from
disclosing any names. The ministry said in its statement that the list
is “strictly limited to a very small number of illegal foreign
entities.”Officials are now debating when or whether to publish the list, with some arguing it shouldn’t be done before the U.S. election.
This certainly doesn’t sound like Apple is going to be targeted but the report says Cisco is highly likely to be named.
The risk for broader markets is that the Chinese response triggers a further escalation from the US and on we go. In the bigger picture, I think China wants to buy time to develop its own semiconductor and technology industry. For now, it needs US parts and other imports.