Keep challenging! The US government blacklisted SMIC and CNOOC

 Keep challenging! The US government blacklisted SMIC and CNOOC

SMIC announced in the Hong Kong stock exchange that the company was listed in the list of Chinese military related enterprises, which had no significant impact on the companys operation.

The company reiterated that the company is an independent international enterprise, investors, customers and other stakeholders all over the world. The company has been adhering to the legal and compliance operation, and comply with the relevant laws and regulations of the place of operation. Its services and products have never been involved in any military use, and are used for civil and commercial purposes.

The company strongly opposes the decision of the U.S. Department of defense, which reflects a fundamental misunderstanding of the end use of our business and technology. The company will continue to maintain positive communication with relevant departments of the U.S. government.

The company has applied to the SEHK to resume trading of its shares on the SEHK from 1 pm on December 4, 2020.

US Department of defense plans to blacklist four Chinese enterprises? CNOOCs response

Within half a year, the US Department of defense listed 31 Chinese enterprises as owned or controlled by the Chinese military, paving the way for the United States to impose sanctions on them. According to an exclusive Reuters report on November 29, the US Department of defense plans to add four Chinese enterprises, including SMIC international and CNOOC, to the blacklist.

According to the report, the move brought the number of Chinese enterprises on the blacklist of the US Department of defense to 35. However, it is not clear when the new list will be published in the Federal Register, the official U.S. regulations publisher.

The U.S. defense authorization act for fiscal year 1999 authorized the Department of defense to compile a list of companies owned or controlled by the PLA and operating in the United States, but the DOD did not take action until 2020.

On June 24, the US Department of defense listed 20 Chinese enterprises, including Huawei, Hikvision and China Mobile, as owned or controlled by the Chinese military; on August 28, 11 more Chinese enterprises were added to the list.

The Financial Times reported in June that listing alone would not trigger sanctions, but the US president could decide whether to impose sanctions, including blocking the property of these enterprises.

On November 12, the U.S. government began to take action. The White House issued an executive order signed by US President trump to prohibit us investors from investing in enterprises associated with the Chinese military.

At the time, Reuters said the move was aimed at preventing U.S. investment companies, pension funds and other institutions from buying and selling the shares of these Chinese companies, and all 31 Chinese companies previously listed in the Defense Departments blacklist will be affected by the ban.

Reuters pointed out on the 29th that the U.S. move and similar policies are believed to be trying to consolidate the outgoing Trumps tough stance on China, and force the incoming Biden to take a tough stance against China at a time when Anti China sentiment of both parties in Congress is high. However, some experts believe that the relevant administrative order is unlikely to cause a major blow to relevant enterprises, because its scope is limited, the Biden administrations position is unclear, and the holding amount of US funds is already very small.

CNOOCs Hong Kong stock price fell 13.97% at the end of the 30th after the news that it was blacklisted by the US Ministry of defense. CNOOC announced on November 30 in the Hong Kong stock exchange that relevant US government agencies may add the controlling shareholder of the company, CNOOC, into the blacklist of enterprises suspected of having ties with the Chinese military. The company has inquired with CNOOC and understands that CNOOC has not received any formal notice or decision from the relevant US government agencies.

In September this year, SMIC was also reported to have been blacklisted by the US Department of Commerce and subject to export restrictions imposed by the US government. At that time, SMIC replied that it had not received such official information.

Trump, who has less than two months left in his term of office, recently stepped up his crackdown on Chinese enterprises. Last week, Reuters said the U.S. plans to define 89 Chinese companies as military related and restrict their purchases of U.S. products and technologies.

In response, Chinese Foreign Ministry spokesman Zhao Lijian said at a regular press conference on November 23 that China firmly opposes the US sides groundless crackdown on Chinese enterprises and has repeatedly expressed its solemn position on this issue. What the United States has done seriously violates the market competition principles and international economic and trade rules that the United States has always boasted, and will certainly damage the national interests and self-image of the United States.

Zhao Lijian stressed that Chinese enterprises always adhere to the rule of law and comply with the laws and regulations of various countries, including the United States, in their international operations. The US side should stop its misbehavior of generalizing the concept of national security and suppressing foreign enterprises.

The US government has blacklisted two Chinese Enterprises_ NF4368