Shares in Chinese chip maker SMIC fell nearly 23% in Hong Kong on Monday;
Because of concerns that the company could become the latest casualty of the US-China technology war.
It was reported that the US Department of Defense plans to add the company to the Commerce Department blacklist, which hinders its business with US companies.
The company "SMIC" manufactures electronic chips and semiconductors, and the Pentagon believes, according to a report, that the company represents a threat to US national security;
Because of its ties to the Chinese military.
Firms on the US blacklist face significant challenges in obtaining biotechnology.
Because American companies are prohibited from selling to these companies unless they first obtain a license to do so, and the escalating restrictions on the Chinese technology company Huawei, which was added to the list last year, threatens to paralyze its business around the world.
Suspicion of cooperation with the Chinese army
The US authorities believe that SMIC has strong ties with the Chinese military, and Yinan Hai, an American professor of Chinese origin at The Hague University in Pennsylvania, who specializes in Sino-American affairs, said that this development “is not just part of an ongoing attempt to deprive Huawei from supplying chips, but also a step in a new direction, which is cutting the way for the Chinese military to manufacture chips, or advanced semiconductor products. "
The Chinese company is one of Huawei's largest suppliers of chips and semiconductors.
The US move came after the Pentagon issued a few days ago a detailed report on the Chinese military's military and technological capabilities.
In an interview with Al-Jazeera Net, Professor Hai indicated that, “Given the alarm that the new Pentagon report issued on Chinese military might, Washington may take additional measures from now on to prevent the transfer of both militarily sensitive and civilian technologies to the People's Liberation Army, which were previously prepared. Insensitive to that extent, such as semiconductor chips, computer software or precision imaging tools. "
In Professor Hay's opinion, a whole group of Chinese academic institutions have been placed on the list of Washington entities;
Because of its role in the ambitious "civilian military fusion" strategy devised by Chinese President Xi Jinping.
“I expect to see more civilian manufacturers in China appear on the list,” says Hay.
And she believed that trade relations between the United States and China should remain somewhat stable before the elections, especially after Trump played with the China file through other cards such as Huawei, the Corona virus, and the "Confucius" institutes.
She expected the presidential elections to affect the future of the two countries' relations.
After the elections, depending on who gets to the White House, trade friction may renew with Trump's victory, while the situation will remain calm in the event of Joe Biden's victory, despite the fact that the possibility of canceling the tariffs imposed by Trump without a major Chinese concession is very small. .
The Chinese company is Huawei's largest supplier of chips and semiconductors (Getty Images)
Another step, not the last
The US administration’s move represents a recent part of an ongoing effort to put pressure on Chinese technology companies. SMIC said in a statement issued last Sunday that it is in complete shock and confusion, and confirmed in its statement that it provides services only to civil and commercial end users.
The company denied any relationship with the Chinese army, and said that "any assumptions about the company's relations with the Chinese army are incorrect statements and false accusations, and stressed that it is open to honest and transparent communication with US government agencies in the hope of resolving the potential misunderstanding."
The company is seen as a major player in China's efforts to boost the domestic semiconductor industry, an ambition that has been compounded in importance by the US-China trade war.
Imposing restrictions and controls on US exports to SMIC would affect US companies selling chipmaking technology to manufacturers in China.
And US officials announced recently that their government will tighten restrictions on "Huawei", the largest Chinese technology company, in order to take strict measures against the telecom company's access to commercially available chips.
These restrictions prevent Huawei from obtaining semiconductors without a special license, and SMIC is one of the largest manufacturers of chips for Huawei.
With the escalation of tensions between the United States and China, US officials are pushing other governments around the world to impose restrictions on Huawei, under the pretext that the company provides its data to the Chinese government, and Huawei denies that it is spying for the Chinese government.
The Trump administration also issued executive orders last month prohibiting transactions with several companies, in addition to pressuring the application of "TikTok" and "WeChat" to liquidate their business in the United States, or transfer their ownership to an American partner.