Chinese president Xi Jinping in the Great Hall of the People in Beijing, China, March 10, 2021 (Carlos Garcia Rawlins/Reuters ) The Treasury Department is defending Biden’s move, but it may end up helping a Chinese company in Beijing’s efforts at Uyghur suppression.
The White House’s announcement of a new executive order to combat Chinese companies with ties to Beijing’s military-industrial base and repressive surveillance tactics was met with praise for continuing and refining a commendable Trump-era policy.
On June 3, President Biden issued an order to address the threat from investments that finance certain Chinese firms, ostensibly expanding his predecessor’s Chinese military-company investment ban and moving responsibility for designations of these companies from the Pentagon to the Treasury Department. “President Biden also expanded the scope of this national emergency by finding that the use of Chinese surveillance technology outside the PRC, as well as the development or use of Chinese surveillance technology to facilitate repression or serious human rights abuses, constitute unusual and extraordinary threats,” the White House added in its statement on the move. It announced the 59 Chinese firms that would immediately be targeted under the order, which implements a similar investment ban.
There’s a catch. The new order frees 16 previously designated companies from the Trump-era investment bans, including Dawning Information Industry Co. (or Sugon), a supercomputing firm involved in Beijing’s development of nuclear and hypersonic weapons-testing and in its surveillance of Uyghurs.
What’s strange about this is that the U.S. government still officially views Sugon as a target of other restrictions on Chinese tech companies. Sugon remains blacklisted under the Commerce Department entity list, which prevents U.S. firms from doing business with listees.
In an emailed statement responding to a question about the Sugon delisting, a Treasury Department spokesperson defended the move, suggesting that the designation had been legally vulnerable. “The [executive order] creates new legal standards for designating entities. One of our primary goals was ensuring that any future prohibitions are on legally solid ground, and our first listings under the new E.O. reflect that.”
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