US adds more Chinese tech companies to ban list

The Chinese and U.S. national flags. REUTERS/Thomas Peter/Pool/Files

WASHINGTON (Reuters) – The US Commerce Department said on Friday it was adding several Chinese companies and a government-owned institute involved in supercomputing with military applications to its national security “entity list” that bars them from buying US parts and components without government approval.

The export restriction announcement adding the firms to what is effectively a trade blacklist is the latest effort by the Trump administration to restrict the ability of Chinese firms to gain access to US technology amid an ongoing trade war.

The department said it was adding Sugon, the Wuxi Jiangnan Institute of Computing Technology, Higon, Chengdu Haiguang Integrated Circuit and Chengdu Haiguang Microelectronics Technology – along with numerous aliases of the five entities – to the list over concerns about military applications of the supercomputers they are developing.

Wuxi Jiangnan Institute of Computing Technology is owned by the 56th Research Institute of the General Staff of China’s People’s Liberation Army, the Commerce Department said, adding “its mission is to support China’s military modernization.”

The Chinese Embassy in Washington did not immediately return a request for comment.

China’s state broadcaster, China Radio International, said in an editorial on Saturday that the move was one of a series of recent actions by the United States that violated the consensus reached by President Donald Trump and his Chinese counterpart Xi Jinping in Argentina last December. 

“No matter whether it is aimed at suppressing Chinese technology or its long-term economic development, or put pressure on China in the trade negotiations, the United States will not achieve its aims,” it said. 

In 2015, the Commerce Department added China’s National University of Defense Technology (NUDT) to the list “because of its use of U.S.-origin multicores, boards, and (co)processors to power supercomputers believed to support nuclear explosive simulation and military simulation activities.”

The Commerce Department said on Friday that since 2015 NUDT has procured items under the name Hunan Guofang Kei University using four separate, additional addresses not already on the entity list. The department said on Friday it is now adding Hunan Guofang and the four addresses to the list.

The companies “pose a significant risk of being or becoming involved in activities contrary to the national security and foreign policy interests of the United States,” the Commerce Department said.

In May, the Trump administration added China’s Huawei Technologies Co Ltd to the entity list and 68 affiliates in more than two dozen countries. US President Donald Trump has said that the United States could resolve complaints about Huawei as part of a trade deal.

The world’s two largest economies have ratcheted up tariffs in a battle over what US officials call China’s unfair trade practices.

The United States, China, the European Union and Japan have all announced plans to build exaflop-capable supercomputers.

In March, a US government-led group said it was working with chipmaker Intel Corp and computermaker Cray Inc to develop and build the country’s fastest computer by 2021 for conducting nuclear weapons and other research.

The Department of Energy and the Argonne National Laboratory in Illinois are working on a supercomputer dubbed “Aurora with Intel,” the world’s biggest supplier of data center chips, and Cray, which specializes in the ultra-fast machines.

The $500 million contract for the project calls on the companies to deliver a computer with so-called exaflop performance – that is, being able to perform 1 quintillion – or 1,000,000,000,000,000,000 – calculations per second.

Earlier this week, Nvidia Corp, a major chip supplier to supercomputer makers, said it was working with Softbank Holdings Group owned chip firm Arm Holdings to make its chips work with Arm’s for supercomputers.

Ian Buck, vice president of Nvidia’s accelerated computing unit, said that the effort was aimed at European and Japanese customers rather than Chinese groups, which are increasingly turning to domestic chips.

“In terms of China, I think they’ve clearly stated that they have a domestic accelerator and processor strategy that they will pursue, and that’s clearly what they are doing,” Buck said.

(Reporting by David Shepardson; Additional reporting by Stephen Nellis in San Francisco and Winni Zhou in Shanghai; Editing by Jeffrey Benkoe, Bill Rigby and G Crosse)

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