China has implemented export restrictions targeting 10 American firms, including two engaged in rare earth mining. This move is a direct reaction to the Pentagon’s decision to add Chinese tech giants to its list of military-affiliated companies.
The imposed controls prohibit the export of dual-use items to these U.S. companies. Additionally, these restrictions apply to goods of Chinese origin possessed by entities or individuals outside China, as stated by China’s Commerce Ministry on Monday.
The announcement emphasized, “Relevant export activities that are being carried out should be stopped immediately.”
China considers this action a response to what it calls “the U.S. government’s malign practice” which it claims safeguards China’s national security and fulfills its “nonproliferation and other international obligations.” A spokesperson from the ministry supported this stance in an additional statement.
Newsweek attempted to seek a response from the Pentagon during its out-of-office hours.
Impact of China’s New Restrictions
The restrictions may have more symbolic impact as these American companies primarily collaborate with the U.S. Defense Department and do not engage significantly with Chinese business.
The sanctions list includes U.S. defense industry players such as AVEOX, Red Cat, Teal Drones, IMSAR, Jaia Robotics, BAE Systems’ Space & Mission Systems, Oshkosh Defense, and L3Harris Maritime. It also targets rare earth firms like MP Materials and USA Rare Earth.
MP Materials is known for operating the Mountain Pass in California, the only U.S. facility dedicated to rare earth mining and processing. USA Rare Earth is currently establishing a magnet supply chain spanning Colorado, Texas, and Oklahoma.
Pentagon Adds Tech Firms to Watch List
Earlier this month, the Pentagon’s 1260H list, identifying Chinese tech firms associated with China’s military advancements, saw additions such as electric car manufacturers BYD and NIO. Baidu, a search engine and mapping service provider, along with Alibaba, an e-commerce giant developing AI models, were also included in the watch list.
The list, featuring 188 entities, doesn’t immediately impose sanctions. However, it alerts U.S. firms of possible risks regarding future investment or screening restrictions.
Moreover, China’s Finance Ministry announced a halt to government procurement from 46 American companies on Monday. Notably, this restriction doesn’t apply to U.S.-funded firms operating in China, according to Xinhua’s state news agency.
The Global Times, a state-controlled tabloid, mentioned that U.S. defense companies like Lockheed Martin, Raytheon Missile & Defense, Boeing Defense, and Space & Security—already subject to previous sanctions—are included in the recent list shared with Chinese firms.