China has added ten US companies it accuses of having connections to the US military to a blacklist, meaning Chinese companies are banned from exporting dual-use items to those on the list. China’s Commerce Ministry said this move is in direct response to the US adding tech companies such as BYD, Baidu and Alibaba to a similar list several weeks earlier.
The US companies listed are involved in the defense industry, and as such are unlikely to be able to do business in China anyway—Ball Aerespace & Technologies, Teal Drones, Oshkosh Defence, MP Materials and USA Rare Earth to name a few. This suggests that Beijing’s response is largely symbolic and may be a warning to the US administration against imposing any further restrictions on Chinese companies which have strong business interests in the US.
This tit for tat comes despite pledges during the recent Trump-Xi summit in Beijing to mitigate tensions and suggests a continuing separation of the world’s two largest economies. Previous US administrations have generally at least been more consistent in their approach towards China, but the logic behind many of the Trump administration’s decisions is hard to divine, and in many cases leaves opportunities for its rival to take advantage of. The defining factors in 21st century geopolitical confrontations include trade, supply chains, semiconductors and rare earths, to name but a few. The danger is, as has happened many times in history, economic standoffs are simply the precursor of more direct confrontations.