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Reuters, November 23: According to a draft seen by Reuters, the Trump administration is close to announcing that 89 Chinese companies in aerospace and other fields have ties to the military and will prevent them from buying a range of American products and technologies.
If this list is published, it may create more tension in the trade relationship between China and the United States and, at the same time, have an impact on American companies and other industries that sell civil aviation components to China.
A spokesman for the US Department of Commerce declined to comment and the list was produced by the Commerce Department. China’s Foreign Ministry has not yet responded to a request for comment.
The list includes Commercial Aircraft Corporation of China, Aviation Industry Corporation of China (AVIC), and 10 related entities. COMAC is a leader in China’s competition with Boeing and Airbus.
This list is included in a draft rule. This rule is used to identify Chinese and Russian companies that the United States considers “military end users.” If they identify themselves as such users, US suppliers must obtain permission to sell them a wide range of commercial products.
According to this rule, the chance that the permit request will be rejected is greater than the approval.
US President Trump has stepped up his actions against China in recent months. Ten days ago, he issued an executive order that prohibits the United States from investing in certain Chinese companies, which Washington says are owned or controlled by the Chinese military.
In April this year, the US Department of Commerce expanded the definition of “military end user.”
The April regulations cover not only the military and the police, but also any individual or entity that supports or assists in the maintenance or production of military items, even if their business is not primarily military.
Export restrictions apply to a wide range of fields, including computer software such as word processing, scientific equipment such as digital oscilloscopes, and aircraft parts.
As far as the aircraft is concerned, these items include everything from the flight control box mount to the engine itself.
Kevin Wolf, a trade lawyer in Washington and a former Commerce Department official, said the Commerce Department shared the draft rules with a technical advisory committee made up of industry representatives, which must be kept secret.
Wolf said the rules and list can be revised, but under the Trump administration, the time for it to take effect is running out. The rule must be approved in mid-December and submitted to the Federal Register, the official US publishing agency for the rules.
The draft seen by Reuters shows that the US Department of Commerce declared that the ability to control the flow of US technology to listed companies is “essential to protect US national security interests.”
But a former US official said anonymously that “simply making a list and completing it is a provocative act,” a source in the aerospace industry said, which may spur China to retaliate.
The aforementioned industry sources said COMAC’s inclusion was a bit surprising for at least one large US supplier. The US supplier has determined that the Chinese company is not a military end user.
General Electric and Honeywell are suppliers to COMAC and both have joint ventures with China Aviation Industry Corporation.
A GE spokesperson said that all of its global joint ventures operate in compliance with the law and that the company has worked hard to obtain licenses related to military end users.
A Honeywell spokesperson declined to comment.
In addition to the list of 89 Chinese companies, the draft also lists 28 Russian entities, including Irkut. The company also plans to enter the Boeing market with its MC-21 aircraft.
The draft indicated that the list of 117 companies “was not the final version”, but only the “initial version”. (End up)
Compile / Review Zhang Mingjun / Li Chunxi / Liu Xiuhong / Du Mingxia / Li Shuang / Zhang Tao / Wang Hongying / Wang Can
