US blacklists five Chinese companies involved in supercomputing
The US bars American companies from conducting business with five Chinese supercomputing companies.
The US Commerce Department has added five companies to its Entity List of organisations that they see as a national security risk. The move comes just days before the US and China are set to resume trade talks.
Chinese companies join Huawei on US blacklist
The US government has already banned American companies from conducting business with Chinese electronics company Huawei, citing the firm as a threat to the national security of the US. Now five more Chinese corporations are barred from buying US computer components unless there is government approval.
Hygon, Chengdu Haiguang Integrated Circuit, Chengdu Haiguang Microelectronics Technology, Sugon, and Wuxi Jiangnan Institute of Computing Technology are the five companies on the US blacklist. The US Commerce Department alleges that the corporations’ actions are ‘contrary to the national security and foreign policy interests of the United States.’
The US Commerce Department said that Hygon revealed that their supercomputers have ‘a variety of military end uses.’ The US is concerned that the companies’ supercomputers could be used to help China’s military.
Will the trade blacklist impact US businesses?
The US trade blacklist could impact US companies in a similar way to chipmakers being affected by the US trade ban.
AMD has a joint venture with Hygon to develop and sell computer hardware. In a statement, AMD’s spokesperson, Drew Prairie, wrote in an email that the corporation will comply with the US Entity List.
‘We are currently evaluating the addition of five new entities to the Entity List by the Bureau of Industry and Security. AMD will comply with the regulations governing that list, just as we have complied with US laws to date,’ noted AMD.
Amanda DeBusk, former US Commerce assistant secretary for export enforcement, said that the new additions to the trade blacklist could help the US put pressure on China before US President, Donald Trump, meets with China’s President, Xi Jinping.
‘Adding more Chinese companies to the US bad guys list may be seen as a way to ramp up the pressure on China,’ said DeBusk.
DeBusk also said that the timing of the addition of the Chinese companies to the blacklist could make China resistant to make progress on trade negotiations with the US.
‘The Chinese may see this as ill-timed bullying. They cannot be seen as making concessions to the United States, so this may have the effect of hurting any chances for trade agreement,’ said DeBusk.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
Please see important Research Disclaimer.
European Central Bank meeting
Learn about how the ECB meeting affects interest rates and price stability ahead of the next announcement on 24 October 2019.
- How might the next meeting affect the markets?
- What are the key rate decisions to watch?
- Why is the Governing Council announcement important for traders?
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.