[ad_1]
The Trump administration is ready to add chipmaker SMIC and offshore oil and gas explorer CNOOC to a list of firms blocked from US investment due to military ties, Reuters reported, in the latest US coup against Beijing. before President-elect Joe Biden takes office. .
Semiconductor Manufacturing International Corp. and China National Offshore Oil Corp. are among four Chinese companies to be added to a list of companies owned or controlled by the military, Reuters reported, citing a document seen and three unidentified people familiar with the matter. . Its incorporation, along with China Construction Technology Co. Ltd. and China International Engineering Consulting Corp., would bring the total number of blacklisted companies to 35.
It was unclear when the new list would be published in the Federal Register, Reuters said. The Defense Department did not respond to Reuters’ request for comment.
CNOOC has yet to receive any official notice or decision from any relevant US government agency, the company’s publicly traded unit said in an exchange report in Hong Kong. The unit, Cnooc Ltd., fell 14% on Monday. China Oilfield Services Ltd., its drilling subsidiary, fell 15%.
“There will be a big impact on the company because the oil and gas value chain involves many American companies from the upstream, mid-stream to the gas side,” said Sengyick Tee, analyst at SIA Energy. “This also means that they cannot purchase parts and software from US companies.”
A Pentagon spokesman did not immediately respond to Bloomberg’s request for comment on the report. Reuters separately reported last week that the Trump administration was close to issuing a list of 89 Chinese aerospace companies and other companies that would not be able to access US technology exports due to their military ties.
President Donald Trump, a Republican, has continued to implement punitive measures against China despite losing the US presidential election earlier this month to Biden, a Democrat. The actions will make it more difficult for the incoming administration to reduce tensions with Beijing, though it could also be said to give the US side more leverage in future negotiations.
China’s Foreign Ministry said it opposed politicizing cooperation between the two countries. “We hope The United States will provide an open, fair and nondiscriminatory environment for Chinese companies working in the United States instead of stretching the concept of national security and imposing discriminatory sanctions or measures on Chinese companies, ”Ministry spokeswoman Hua Chunying said Monday .
In a related executive order earlier this month, the United States said China was “increasingly exploiting” American capital for “the development and modernization of its military, intelligence and security apparatuses,” posing a threat to United States. That order prohibits investment companies and pension funds from buying and selling shares of 31 Chinese companies designated by the Pentagon since June for having military ties.
Exxon, Shell
State-owned CNOOC, the nation’s leading deepwater oil and gas explorer, has ties to key energy producers and projects globally. The firm is among Exxon Mobil Corp.’s partners in its Guyana project, owns a stake in a Royal Dutch Shell Plc LNG export terminal in Australia and a stake in the UK’s North Sea Buzzard oil field. .
CNOOC’s main base of operations is the coastal waters surrounding China, which account for more than 60% of its listed company’s output, with the majority coming from the Bohai Sea near Beijing.
“It will be quite negative for CNOOC, as it has quite a few US partners in projects along the Bohai Bay and in the South China Sea,” said Lin Boqiang, director of the China Energy Economics Research Center at the Xiamen University, by phone.
Operations in the South China Sea, which account for about 29% of production, have at times been controversial because China claims drilling rights in waters far from its borders and within 200 miles of countries such as Vietnam and the Philippines. . The firm also has interests in shale and deepwater projects in the United States, representing a production of around 67,000 barrels of oil equivalent per day, according to its website.
SMIC said in a statement that it is engaging in constructive discussions with the US government, adding that it has no relationship with the Chinese military and does not manufacture for military uses. His actions changed little in Hong Kong.
SMIC restrictions
In September, the US Department of Commerce separately imposed restrictions on SMIC’s export, forcing US companies to apply for a license to ship certain products to China’s largest chipmaker. SMIC and its subsidiaries present “an unacceptable risk of diversion to a military end use,” wrote the department’s Office of Industry and Security.
SMIC represents a cornerstone in China’s vision to create its own world-class semiconductor industry, which the Communist Party sees as an essential foundation for a self-sufficient technology sector. The company is the largest contract chip maker in the country, raising more than $ 7 billion to expand into a Shanghai share offering in July.
SMIC still has a long way to go to catch until rivals such as Taiwan Semiconductor Manufacturing Co., which makes chips for Apple Inc.’s most advanced smartphones, TSMC, the world’s largest contract chip maker, is commercializing 5-nanometer technology, at least two generations ahead of capabilities. by SMIC.
A blacklist from the Trump administration would make that effort more difficult, if not impossible, because SMIC could be excluded from American suppliers like Applied Materials Inc., which tend to make the most advanced chip-making equipment.
– With the assistance of Dan Murtaugh, Sarah Chen, Debby Wu, Qian Chen, Max Zimmerman, Peter Elstrom, Serene Cheong and Colum Murphy
(Updates with CNOOC’s comment in the fourth paragraph, China’s Foreign Ministry’s comment in the eighth.)
