THE Biden administration plans to put more than 30 Chinese companies on a trade blacklist that would prevent them from buying certain American components, deepening tensions between the world’s two economic superpowers.

A source familiar with deliberations said the US Department of Commerce will add Yangtze Memory Technologies, China’s leading maker of memory chips, and the other companies to a so-called Entity List as early as this week. The source asked not to be named, discussing a sensitive matter.

Companies on the Entity List are blocked from buying technology from US suppliers, unless they obtain a special export licence from the Department of Commerce. Earlier, Huawei Technologies’ placement on the list decimated its consumer smartphone business, while the addition of Semiconductor Manufacturing International Corporation hampered its efforts to become China’s chipmaking champion.

China sharply criticised the US moves, arguing that the American government is trying to stop its rise.

Chinese Foreign Ministry spokesperson Wang Wenbin on Wednesday (Dec 14) said the US had “politicised and weaponised economic cooperation”. He added that Washington’s actions disrupted supply chains, and that China would take steps to protect its companies’ rights.

But the Chinese government appeared to be cooperating with US authorities to prevent Yangtze Memory and other firms from being added to the Entity List. China’s Ministry of Commerce helped domestic companies through end-use checks required by the US, including disclosures about products and operations.

The latest move would represent an escalation in the US-China conflict over technology.

In October, the Biden administration unveiled a sweeping set of restrictions on China’s ability to buy semiconductors and chipmaking equipment. These restrictions put Yangtze Memory and 30 other companies on a list for further scrutiny, known as the Unverified List. The list was for companies that American authorities were unable to prove as not supporting the Chinese military.

The action set in motion a 60-day countdown, during which the companies had to prove their businesses were not involved in activities that jeopardised US national security.

Earlier this week, China filed a dispute with the World Trade Organization to try to overturn US-imposed trade controls, arguing they would disrupt global trade.

US officials said the latest chip restrictions were necessary to stop China from becoming more of an economic and military menace. The aim was to prevent China’s chipmakers from securing the capability to make advanced semiconductors that would bolster its military.

Yangtze Memory, based in Wuhan, is the country’s largest 3D NAND semiconductor maker, producing memory chips that go into smartphones and other computing devices, in competition with the likes of Samsung Electronics. The company was in talks to supply chips to Apple, which would have marked a significant step for China’s tech industry. But that has since been put on hold. 

The Financial Times was first to report the Department of Commerce’s intention to blacklist Yangtze Memory. A representative for the company declined to comment. BLOOMBERG