Last week the U.S. Department of Defense released a list drawn up two decades ago of 20 Chinese companies operating in the United States which, according to the Pentagon, have links to the Chinese People’s Liberation Army (PLA).
In a letter dated June 24, the list of Chinese companies that could be subject to sanctions was sent to Congress for review.
The list highlights companies such as Huawei and Hikvision and was designated by the Pentagon under the 1999 National Defense Authorization Act, which now gives President Donald Trump the power to invoke emergency economic powers allowing him to employ economic sanctions against companies linked to the Chinese Communist Party (CCP) military.
As noted by the Washington Examiner, the 1999 act was created so that Chinese companies could not use the access they had to the United States as a means of increasing the military strength of the CCP, especially once China was admitted to the World Trade Organization.
In order for the CCP to increase its military force, it required the Chinese defense secretary to determine “those persons operating directly or indirectly in the United States or any of its territories and possessions that are Communist Chinese military companies” and must also publish a list of those persons in the Federal Register.
The Pentagon also is required to “make additions or deletions to the list on an ongoing basis based on the latest information available,” according to the Washington Examiner.
The International Economic Powers Act gives Trump the power to employ a number of financial tools “to address an unusual and extraordinary threat” to U.S. national security, including Treasury Department sanctions against Chinese companies.
“The list put out by the Pentagon is a start but woefully inadequate to warn the American people about the state-owned and state-directed companies that support the Chinese government and Communist Party’s activities threatening U.S. economic and national security,” said Sen. Marco Rubio (R-Fla.), chairman of the Senate Intelligence Committee.
“The list only touches the surface of the Chinese government’s exploitation of U.S. capital markets” and “it’s critical that American institutional and retail investors know which companies are involved not only with the Chinese Communist Party’s military but also with its espionage, human rights abuses, ‘Military-Civil Fusion Strategy’ and ‘Made in China 2025 industrial policy,′” Rubio added.
Pentagon spokesman Jonathan Hoffman said, “As the People’s Republic of China [the CCP] attempts to blur the lines between civil and military sectors, ‘knowing your supplier’ is critical.”
Hoffman then added that the list “will be a useful tool for the U.S. government, companies, investors, academic institutions, and likeminded partners to conduct due diligence with regard to partnerships with these entities, particularly as the list grows,” according to Bloomberg News.
The list, recently released by the Trump administration, came amid growing tensions between the United States and the CCP as a result of the mishandling of the coronavirus outbreak and its subsequent spread, as well as trade issues and measures taken by Beijing to restrict pro-democracy movements in Hong Kong.
Hikvision criticized the U.S.’s determinations as “unfounded,” claiming that ownership details have always been publicly available as an “independently operated enterprise.”
In addition to Huawei and Hikvision, the list includes China Railway Construction Corp., China Telecommunications Corp., China Aerospace Science and Industry Corp.. and Panda Electronics Group, according to Time magazine.