China won’t back down from the US’ quickening technology war mongering against Chinese companies, but will honor the phase one trade deal while developing its own countermeasures, Chinese experts said on Saturday. 

The US Department of Commerce added another 33 Chinese technology firms, colleges and research institutes into its Entity List, banning these companies from accessing US technology exports.

The US ban came amid China’s two sessions, key political and economic meetings which kicked off in Beijing with the announcement that a national security law concerning the Hong Kong Special Administrative Region was in the making. 

Listed entities included leading cybersecurity firm Qihoo 360, facial recognition software developer CloudWalk Technology and the Harbin Institute of Technology.

China won’t make the first move to scrap the hard-won phase one trade deal between the world’s two largest economies even if the US continues to upgrade the conflict by cracking down on Chinese tech firms, industry insiders told the Global Times.

“The US is likely to include more Chinese tech firms on its Entity List in the future,” Xiang Ligang, director-general of telecoms industry association Information Consumption Alliance, told the Global Times on Saturday.

The tech war will not end along with the trade truce, Xiang noted, adding that the high-tech war will only intensify.

“China has been making many preparations in the face of the US’ attack,” he said.

“As this year’s Government Work Report noted, China’s stand on the phase one trade deal will not change even as the US escalates tensions again by adding dozens of Chinese companies to its blacklist,” said Gao Lingyun, an expert at the Chinese Academy of Social Sciences in Beijing who is close to the Chinese government.

“China will not be the first to tear up the phase one trade deal amid renewed tensions, but the US must know that China has ample countermeasures,” Gao told the Global Times on Saturday.

“Despite a short-term impact on some Chinese firms due to US supply cuts, the trend is obvious: China has been ramping up efforts in its layout of industrial chains in the technology sector, including semiconductors, and the entire chain will grow quickly – especially under pressure,” Xiang said.

CloudWalk said in a statement sent to the Global Times on Saturday that it is regretful that the US has made this decision, and the company has devised a contingency plan to cope with corresponding situations. 

CloudWalk said it has strictly observed laws and regulations in the countries and regions in which it operates, and has firm ethics in the application artificial intelligence.

A source close to the Chinese government revealed to the Global Times in mid-May that China is ready to take a series of countermeasures in response to a US plan to block shipments of semiconductors to Chinese telecoms firm Huawei. One such countermeasure would be putting US companies on an “unreliable entity list.”

US companies like Qualcomm, Cisco, Apple and Boeing were mentioned by the source as potential targets for the countermeasures.

“If it is forced to retaliate, China will target US companies that will hurt the US,” Gao said.

The US’ unilateral moves to escalate tensions with China will hurt the US itself, as has been proven in the past, Gao said.

Ju Jiandong, an expert in finance at Tsinghua University, said the fact that the US has upped the ante in its technology war on Chinese firms, even before the presidential election and the end of the coronavirus pandemic, shows it is pushing very hard on this front. 

Ju urged protections for China’s leading technology firms and ecosystems to prevent further harm.

Global Times

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