The US Department of Commerce has sanctioned a further 29 Chinese shipbuilding-related companies for their purported role in helping China build a chain of artificial islands in the South China Sea.
Twenty-five research institutes of China Shipbuilding Group and four other shipyards were among 77 Chinese entities added to the department’s Entity List, accused of enabling human rights abuses, supporting the militarisation of and unlawful maritime claims in the South China Sea, acquiring US-origin items in support of the People’s Liberation Army’s programmes and engaging in the theft of US trade secrets.
The four shipyards are CSSC Huangpu Wenchong Shipbuilding, Chongqing Chuandong Shipbuilding, Guangxin Shipbuilding & Heavy Industry and Guangzhou Taicheng Shipbuilding Industry.
“China’s corrupt and bullying behaviour both inside and outside its borders harms US national security interests, undermines the sovereignty of our allies and partners, and violates the human rights and dignity of ethnic and religious minority groups,” said US Secretary of Commerce Wilbur Ross.
“Commerce will act to ensure that America’s technology — developed and produced according to open and free-market principles — is not used for malign or abusive purposes.”
Chinese Ministry of Foreign Affairs spokesman Wang Wenbin responded by saying that Beijing would continue to take necessary measures to safeguard the legitimate rights and interests of Chinese companies.
Wang also accused the US of politicising trade issues, claiming that it goes against international trade rules and is “detrimental to the interests of both Chinese and American companies”.
In August, the commerce department slapped sanctions on China Shipbuilding Group’s 722nd Research Institute.
Being added to the department’s Entity List in effect applies a licensing requirement (with a presumption of denial) to the export or re-export of US-origin goods and technology.
Unlike the Department of the Treasury’s Specially Designated Nationals And Blocked Persons List, the Entity List is not an outright ban on doing business with an entity, but it can have the effect of cutting off listed companies from accessing US technology.
Chinese shipbuilding sector observers said the latest move will have little impact on the country’s export shipbuilding sector because, with the exception of CSSC Huangpu Wenchong Shipbuilding, the other sanctioned entities are mostly military-related or involved in domestic shipbuilding activities.
VesselsValue lists CSSC Huangpu Wenchong Shipbuilding with an orderbook of 21 containerships, ro-ros and offshore vessels.
It is unclear what impact being added to the list will have on the yard’s ability to deliver these ships, although shipbuilding sources believe it will be minimal.
