China to Create Blacklist of 'Unreliable' Foreign Firms, Individuals

Posted June 02, 2019

The move is not entirely suprising, considering the mounting pressure the U.S. has been putting on Chinese technology giant Huawei.

Top U.S. tech companies, including Alphabet Inc.'s Google and semi-conductor giant Qualcomm Inc., began cutting off supply of critical components and services to Huawei shortly after the DoC decision.

The ongoing trade war between the USA and China is showing no sign of slowing down and it could actually get worse as China has announced plans to follow in the US' footsteps by creating a blacklist of its own.

That said, it is unclear what will happen exactly when a company gets put on China's blacklist.

Similar to US Commerce Department "Entity List" that bans Huawei and other Chinese firms from doing business with US firms, a statement from China's Commerce Ministry says arrangement are on to establish an "unreliable entity list" which would blacklist foreign companies, individuals and organizations that violate local market rules.

According to Reuters, FedEx apologized this week for delivery errors on Huawei packages following reports that packages were returned to senders.

Huawei officials have questioned whether the diversions were truly inadvertent. On another front, President Donald Trump said he plans to impose a 5% USA tariff on all Mexican goods over illegal immigration.

It's been weeks since the U.S. listed Huawei in its Entity list, effectively banning the brand from being used by other United States companies.

China's response seems to escalate trade-war tensions, but in reality, there's probably little that China can do to whatever companies end up on its list.

Cutting off exports to the USA could give Beijing leverage in trade talks as China supplies 80 percent of the rare earths imported by the United States. The measures would likely focus on heavy rare earths, a sub-group of the materials where the U.S.is particularly reliant on China.

China announced its investigation into FedEx on the same day that its latest tariffs on United States dollars 60 billion worth of US products went into effect.

-With assistance from Crystal Chui and Dandan Li.