US imposes restrictions on Chinese companies over spy balloon incident

The United States added 37 Chinese companies to a trade blacklist on May 9, including some companies accused of supporting a suspected spy balloon that flew over U.S. soil last year.

The Commerce Department said it was also targeting those seeking to acquire U.S. goods to advance China’s quantum technology capabilities.

“These activities have significant military implications and pose a significant threat to U.S. national security,” the Commerce Department said in a statement.

Companies added to the so-called “entity list” are prohibited from purchasing U.S. goods and technology without government approval.

The latest additions to China’s “high-altitude balloon program” come after the Commerce Department placed six Chinese companies on the trade restriction list in February 2023 due to the balloon accident.

The balloon’s day-long flyover from Alaska to South Carolina caught the attention of many Americans before the U.S. military shot it down off the country’s east coast.

On Thursday, the Commerce Department added that certain targeted companies this time were also linked to advances in China’s nuclear programs or were “involved in supplying controlled goods to Russia” after Moscow’s invasion of Ukraine in 2022.

The latest update to the entity list represents an important step in addressing the challenges posed by China, said Alan Estevez, Undersecretary of State for Trade and Industry and Security.

“We must remain vigilant in our efforts to prevent companies like these from accessing U.S. technologies that could be used in ways that harm our national security,” he added in a statement.

Reacting to the Commerce Department’s move, Beijing said it has “always firmly opposed” the United States’ entity list and the way it is used to “restrict and suppress” Chinese companies.

Foreign Ministry spokesman Lin Jian said at a news conference that China and Russia have the right to carry out normal economic and trade cooperation without interference or restrictions.

“I want to emphasize that the United States has long suppressed Chinese companies on the grounds of alleged risks to national security, but has never succeeded in producing so-called evidence,” he said.