WASHINGTON — The Trump administration added 5 Chinese entities to a United States blacklist on Friday, additional proscribing China’s entry to American know-how and stoking already excessive tensions as President Trump and President Xi Jinping of China put together to satisfy in Japan subsequent week.
The Commerce Department introduced that it might add 4 Chinese firms and one Chinese institute to an “entity list,” saying they posed dangers to American nationwide safety or international coverage pursuits. The transfer primarily bars the entities, which embody certainly one of China’s main supercomputer makers, Sugon, and numerous its subsidiaries set as much as design microchips, from shopping for American know-how and parts with no waiver from the United States authorities.
The transfer may all however cripple these Chinese companies, which depend on American chips and different know-how to fabricate superior electronics. Those added to the entity checklist additionally embody Higon, Chengdu Haiguang Integrated Circuit, Chengdu Haiguang Microelectronics Technology, and Wuxi Jiangnan Institute of Computing Technology, which lead China’s growth of excessive efficiency computing, a few of which is utilized in army functions like simulating nuclear explosions, the Commerce Department mentioned.
It follows comparable efforts to ban different Chinese tech firms from accessing American know-how, together with telecom tools big Huawei, which was added to the blacklist in May. The administration can be contemplating including Hikvision, a surveillance-technology firm, to the checklist, The New York Times has reported.
The addition of Chinese firms to the entity checklist may complicate the international locations’ efforts to succeed in a commerce deal. The transfer comes simply as American and Chinese officers have restarted commerce talks after they collapsed in May and as Mr. Trump and Mr. Xi put together to satisfy subsequent week on the Group of 20 assembly in Osaka, Japan.
The Trump administration has already imposed tariffs on $250 billion value of products from China and is transferring forward with plans to add tariffs to an additional $300 billion of Chinese products unless China agrees to a trade deal.
But a fast resolution is looking increasingly unlikely. Both sides have stepped up their language on remaining tough in further trade talks and the Chinese government has said it is putting together its own “unreliable entities list” of foreign companies and people, an apparent first step toward retaliating against the United States for denying vital American technology to Chinese companies.
Sugon is one of China’s most important makers of high-performance computers and servers, with 10 out of the top 20 fastest supercomputers in China, according to China’s TOP100 rankings in 2018. The immensely powerful machines serve entities including China’s government and power weather prediction capabilities and its largest technology companies.
Most are also studded with American technology — in most cases the computers rely on a mix of microchips from Intel and Nvidia. By placing the company on the list, the Trump administration would effectively cut it off from the tiny brains it needs to make the billions of calculations required to model weather patterns and support video apps and online shopping.
Also on the list was a Sugon subsidiary that had formed a partnership with the American chip maker Advanced Micro Devices to create microchips that could satisfy security demands for Chinese government customers. Some Chinese officials said the chips could be used in a new generation of faster supercomputers. By relying on chips made by AMD and Intel, Sugon’s supercomputers are able to run a wider array of software than some of the country’s faster computers built around domestically produced chips.
With just over $1 billion in revenue last year, Sugon is tiny compared to Huawei, which was placed on the entity list last month. Still, its exclusion from American technology will represent an especially bitter pill for Beijing to swallow, as its supercomputers form the core of some of the Chinese government’s most sensitive and important systems.
Sugon supercomputers support State Grid, the monopoly that runs China’s electric grid; China Mobile, the country’s largest telecom services provider; and the China Meteorological Administration, which runs weather prediction. It also makes data centers for companies like e-commerce giant JD.com and Bytedance, the owner of social media app TikTok.
The companies could still obtain a license to purchase American technology. But their presence on the list suggests that they would receive intense scrutiny, and such an approval might be unlikely.