In latest China jab, US drafts list of 89 firms with military ties

WASHINGTON: The Trump administration is close to declaring that 89 Chinese aerospace and other companies have military ties, restricting them from buying a range of US goods and technology, according to a draft copy of the list. Commercial Aircraft Corp of China Ltd (COMAC), which is spearheading Chinese efforts to compete with Boeing and Airbus, is on the list, as is Aviation Industry Corporation of China (AVIC) and 10 of its related entities. The list is included in a draft rule that identifies Chinese and Russian companies the US considers “military end users,” a designation that means US suppliers must seek licenses to sell a broad swath of commercially available items to them. According to the rule, applications for such licenses are more likely to be denied than granted. US President Donald Trump has stepped up his actions in recent months against China. Ten days ago, he unveiled an executive order prohibiting US investments in Chinese companies that Washington says are owned or controlled by the Chinese military. The pending list comes after the Commerce Department expanded the definition of “military end user” in April. The April rule includes not only armed service and national police, but any person or entity that supports or contributes to the maintenance or production of military items — even if their business is primarily non-military. The export restriction applies to items as disparate as computer software like word processing, scientific equipment like digital oscilloscopes, and aircraft parts and components. In terms of aircraft, the items include everything from brackets for flight control boxes to the engines themselves. News of the list comes at a sensitive time for the US aerospace industry as Boeing seeks Chinese approval of its 737 MAX after it was cleared by US regulators last week. In March 2019, China was the first nation to ground the jet following two fatal crashes and it is already expected to wait months to lift the ban. A spokesman for Boeing declined to comment. Washington trade lawyer Kevin Wolf, a former Commerce official, said Commerce had shared the draft rule with a technical advisory committee of industry representatives, and it should have been kept confidential. Wolf said the rule and list still could be modified and that the clock was running out for it to go into effect under the Trump administration since it would need to be cleared and sent to the Federal Register, the official US publication for rules, by mid-December. In the draft rule, the Commerce Department said being able to control the flow of US technology to the listed companies was “vital for protecting US national security interests”. — Reuters