China sanctions seven US entities

China widened its retaliation against recent U.S. restrictions on Wednesday, barring Chinese organizations and individuals from doing business with seven American entities, tightening export controls on drones and related technology headed to the United States, and restricting U.S. agencies’ role in Chinese factory-certification inspections. China’s Commerce Ministry said the steps answered U.S. actions affecting Chinese telecom operators, testing laboratories, drones, consumer routers, submarine cables, advanced robotics equipment and power inverters. Beijing also cited Washington’s addition last week of more than 40 Chinese entities to the Uyghur Forced Labor Prevention Act list. Reuters reported the measures as Xi Jinping prepares for a September visit to the United States. ### Which seven U.S. entities did China target? Compliance Testing LLC, based in Mesa, Arizona, was added to a Chinese countermeasures list that bars Chinese organizations and individuals from dealing or cooperating with it, according to Reuters. Beijing said the firm had “assisted and supported” recent Federal Communications Commission measures targeting China, though it did not provide further detail. (finance.yahoo.com) Six other U.S. entities were separately hit with the same business-dealing ban: Applied DNA Sciences, Stratum Reservoir, Altana Technologies, the Responsible Business Alliance, Verité Group and Human Rights in China. China’s official English-language Xinhua service said those six were accused of assisting and supporting what Beijing called unlawful U.S. Xinjiang-related sanctions. (finance.yahoo.com) ### What changed on drones? China said it would enforce stricter review of drones, drone components and related technology bound for the United States, according to the Commerce Ministry statements summarized by Reuters and The Hill. Reuters said the move tightened export controls on U.S.-bound drones and related technology, extending Beijing’s recent use of export licensing and countermeasure tools beyond chips into other technology categories. (finance.yahoo.com) The U.S. side had moved earlier against Chinese drone access. The Hill reported that China tied its response in part to an FCC ban on imports of drones and to other U.S. actions targeting Chinese-made equipment on national-security grounds. ### Why did certification inspections become part of the dispute? China’s State Administration for Market Regulation said U.S. firms that conduct factory inspections on behalf of Chinese entities for China Compulsory Certification can no longer perform those inspections or provide those certifications, The Hill reported. (finance.yahoo.com) The CCC system is China’s mandatory product-safety and quality certification regime for a wide range of goods. (thehill.com) The FCC action cited by Beijing helps explain the linkage. Reuters reported that in April the FCC adopted a fast-track review process for devices tested in U.S. or reciprocal-country laboratories and proposed ending recognition of testing laboratories and certification bodies in countries without reciprocal arrangements with Washington. If finalized, Reuters said, that could make it harder for China-based labs and certification bodies to help manufacturers obtain FCC equipment authorization for devices sold in the United States. (thehill.com) ### What U.S. actions did Beijing say prompted the move? Last week’s U.S. addition of more than 40 Chinese entities to the Uyghur Forced Labor Prevention Act list was one stated trigger, Reuters reported. Beijing also pointed to U.S. restrictions affecting Chinese telecom operators, testing labs, drones, routers, submarine cables, advanced robotics equipment and power inverters. (finance.yahoo.com) Alfredo Montufar-Helu, managing director at Ankura China in Beijing, told Reuters the move was retaliatory and “hardly a surprising one,” adding that Beijing had spent recent months building out its countermeasures toolkit. Reuters also reported that the announcement came after it disclosed the Trump administration was drafting a national-security measure to bar U.S. imports of new models of Chinese data-center components, including optical transceivers. (finance.yahoo.com) ### Where does this leave the next round of U.S.-China contacts? September is the next named milestone. The Hill reported that Xi is scheduled to visit President Donald Trump more than a month after Wednesday’s measures, following Trump’s May trip to Beijing. Late July is the other marker to watch. Reuters said Washington added more than 40 Chinese entities to the forced-labor list last week, and Beijing’s August 5 response tied that move to the new sanctions, drone controls and certification restrictions. (finance.yahoo.com) (thehill.com)