WASHINGTON • The Trump administration has taken another swipe at China and its biggest firms, imposing sanctions on officials and companies for alleged misdeeds in the South China Sea and imposing an investment ban on nine more firms.
The moves come just days before President Donald Trump steps down and President-elect Joe Biden takes office.
Executives of state-owned enterprises, officials of the Chinese Communist Party and the military, along with oil giant CNOOC, face new restrictions for allegedly using coercion against states with rival claims in the South China Sea.
Senior US officials told reporters on Thursday the new CNOOC restrictions would not apply to crude, refined fuels and liquid natural gas and do not apply to existing joint ventures with CNOOC that do not operate in the South China Sea.
Nine Chinese firms were added to the Pentagon's list of companies with alleged ties to the Chinese military, including planemaker Comac and phonemaker Xiaomi.
Those companies will be subject to a new US investment ban which forces American investors to divest holdings of the blacklisted firms by Nov 11.
Chinese Foreign Ministry spokesman Zhao Lijian said in Beijing yesterday that China firmly opposed the new sanctions.
"This action is against the trend of the times and is against its self-touted market competition and international economic trade rules," he said.
In a statement later yesterday, China's Ministry of Commerce said the US was using "all kinds of excuses" to suppress Chinese companies and urged Washington to correct its wrongdoings.
Shares in Xiaomi closed down 10 per cent yesterday, against a 0.4 per cent drop in the Hang Seng Index, while CNOOC shares fell by 1.1 per cent.
The US has long opposed China's territorial claims in the South China Sea, a potentially resource-rich area that is also a trade route. Washington accuses Beijing of intimidating states such as Vietnam and the Philippines that have rival claims there.
China accuses Washington of trying to destabilise the region by sending warships and planes to the South China Sea.
"The United States stands with South-east Asian claimant states seeking to defend their sovereign rights and interests, consistent with international law," Secretary of State Mike Pompeo said in announcing the sanctions.
Mr Pompeo said Washington was imposing visa restrictions on executives of Chinese state-owned enterprises and officials of the Chinese Communist Party and navy.
The sanctions were directed against those "responsible for, or complicit in, either the large-scale reclamation, construction or militarisation of disputed outposts in the South China Sea, or use of coercion against South-east Asian claimants to inhibit their access to offshore resources".
The Commerce Department accused CNOOC of harassing and threatening offshore oil and gas exploration and extraction in the South China Sea to drive up the political risk for its rivals.
Commerce Secretary Wilbur Ross said CNOOC acted as "a bully for the People's Liberation Army to intimidate China's neighbours" and the Chinese military "continues to benefit from government civil-military fusion policies for malign purposes". Mr Ross' department added CNOOC to an entity list that requires firms to be granted a special licence before they can receive exports of high-tech items from US suppliers.
The Trump administration has pulled some punches against Beijing in its final days as the Treasury Department has eased some hardline policies.
On Wednesday, it scrapped plans to blacklist Chinese tech giants Alibaba, Tencent and Baidu.
On Thursday, Treasury also issued a general licence exempting US securities exchanges from the investment ban for transactions with newly blacklisted Chinese companies.
REUTERS
