Following the Dragon Boat Festival holiday, the first working day after the holiday saw the Chinese Ministry of Commerce and Ministry of Finance simultaneously releasing announcements imposing export controls on 10 U.S. entities and banning the government from procuring products from 46 American companies. This move is seen as a retaliatory action against the U.S. for expanding the “Chinese military enterprise list”.
Many interviewed experts analyze that the symbolic significance of this round of retaliation far exceeds the actual impact, but it will push countries like the U.S. and Japan to accelerate efforts to reduce reliance on key minerals from China, making the decoupling between China and the U.S. more comprehensive and thorough.
On June 22, the Chinese Ministry of Commerce announced that companies including Avioxx Aero Systems were among the 10 U.S. entities placed under export control, with these enterprises manufacturing equipment such as radars, underwater robots, military drones, military power supplies, aviation components, and even rare earth companies.
On the same day, the Chinese Ministry of Finance also issued a notice specifying that the government shall not purchase products produced by 46 U.S. companies.
According to reports from China News, the coordinated actions of these two major departments are aimed at both squeezing the supply chain externally by halting sales to China and protecting the domestic market by ceasing purchases from the U.S.
Su Ziyun, Director of the Institute of National Defense Strategy and Resources at the Taiwan Institute for National Defense and Security Studies, stated in an interview with Epoch Times that China’s sanctions were in response to U.S. sanctions on Chinese companies such as Xiaomi Automotive. Therefore, it is a politically retaliatory signal.
Xu Zhen, a senior figure in the mainland capital industry, mentioned that the U.S. companies sanctioned by China are primarily military contractors, with their main markets in the U.S. and low reliance on the Chinese market.
Furthermore, Xu Zhen believes that U.S. related companies have long been excluded from core procurement within the Chinese system. “The Chinese government, financial institutions, and central SOEs are concerned about infiltration and data leakage, and have been conducting large-scale import substitution in recent years.”
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