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US provides drone maker DJI and seven different Chinese firms to put money into blacklist

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The US Treasury Department introduced on Thursday It has imposed funding restrictions on corporations due to their position in facilitating human rights abuses towards China’s Uighur Muslims. xinjiang and different ethnic and non secular minorities.

As a consequence, US buyers can be barred from shopping for or promoting shares of the businesses.

Brian Nelson, Under-Secretary of Terrorism and Financial Intelligence, mentioned: “Today’s action highlights how private companies in China’s defense and surveillance technology sectors are active in the government’s efforts to suppress members of ethnic and religious minority groups. cooperating actively.” “The Treasury is committed to ensuring that the US financial system and US investors are not supporting these activities.”

The information was broadly anticipated after it was first reported by financial Times earlier this week.
DJI and 7 different firms already US unit list, which implies they’re barred from shopping for American merchandise or importing American expertise with no particular license.

Dozens of Chinese firms and organizations had been added to that export blacklist by the US Commerce Department on Thursday to restrict China’s use of US applied sciences for navy functions and for alleged human rights violations.

Thursday’s twin bulletins got here every week after the Treasury slapped comparable financial sanctions towards two Chinese politicians and a Chinese synthetic intelligence agency, SenseTime.

SenseTime delays its IPO after being hit by another US blacklist

The drone maker declined to remark forward of the US Treasury announcement on Wednesday. Instead, it referenced CNN Business in a earlier assertion it made in response to earlier sanctions final December, when it mentioned it “did nothing to justify being placed on the entity list.”

DJI added on the time that it was “evaluating options to ensure fair treatment to our customers, partners and suppliers,” with out elaborating additional. It declined to offer an replace or touch upon these plans this week.

Washington’s newest clampdown may spell financing complications for the upstart drone maker, which is privately primarily based and headquartered in Shenzhen.

DJI presently counts Silicon Valley heavyweights like Sequoia Capital China and Kleiner Perkins as buyers. Sequoia Capital China declined to remark and Kleiner Perkins didn’t reply to a request for touch upon whether or not the sanctions would complicate their funding.

But in keeping with an individual accustomed to the matter, Sequoia’s funding in DJI is managed by Sequoia Capital China, which operates as a separate authorized entity from the US agency.

This means it won’t be affected by any restrictions apart from US investments in DJI, the particular person mentioned.

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Washington has been pressuring Chinese firms these days.

Artificial intelligence startup SenseTime final Friday also hit Same US Treasury blacklist as DJI, two years after certainly one of its subsidiaries unit list in 2019.

Similarly, the Treasury Department mentioned the choice to dam SenseTime was as a consequence of its expertise’s alleged position in enabling human rights abuses towards Uighurs and different Muslim minorities in Xinjiang.

Sensetime has vehemently denied the allegations. But on Monday the corporate Postponed Its inventory alternate debuted in Hong Kong, the place it was set to start buying and selling as early as this week.

The agency mentioned the delay was “to protect the interests of potential investors of the company” and allowed them to “consider the potential impact” of the US transfer on any investments.

US adds a dozen Chinese companies to its trade blacklist

Separately, US officers additionally mentioned on Thursday One of China’s prime chip makers has strict guidelines about whether or not to promote.

The firm, Semiconductor Manufacturing International Corp (SMIC), has been on the US entity checklist. since last year, But “the decision included a provision that critics said had been exploited by some companies,” in keeping with the FT.

SMIC didn’t reply to a request for remark,

However, because it was positioned on the entity checklist, “the company has faced tremendous challenges in production and operation,” mentioned Gao Yonggang, Acting President and Chief Financial Officer of SMIC. said Last month.

Separately, final yr the US Defense Department additionally added the agency to a listing of firms that the company claims are owned or managed by the Chinese navy. That determination implies that Americans are barred from investing in SMIC.

US strikes at center of China's effort to become a technological superpower

On Wednesday, China’s overseas ministry criticized the United States after Washington reported a deliberate motion.

At a briefing, spokesman Zhao Lijian referred to as on the Biden administration to cease “politicizing” technical and financial points by “generalizing the concept of national security.”

“Stop abusing state power to unreasonably oppress China’s specific sectors and enterprises,” Zhao mentioned, including that sanctions on firms akin to SMIC and DJI would threaten world industrial and provide chains, and improve worldwide commerce rules. will weaken it.

“China, as always, will firmly defend the legitimate rights and interests of Chinese companies,” he mentioned.

— CNN’s Beijing Bureau and Jill Disis contributed to this report.

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