Previously, the U.S. Department of Defense unilaterally expanded the scope of control and unreasonably included 188 Chinese companies in the so-called military company list, including Alibaba, Baidu, BYD and other leading technology and new energy companies that are deeply involved in the civilian market. This “one-size-fits-all” suppression measure by the U.S. that does not distinguish between military and civilian industries has seriously disrupted the normal international trade order and damaged the legitimate rights and interests of Chinese companies.
After rigorous evaluation and plan formulation, the Ministry of Commerce officially issued Announcement No. 23 on June 22, which legally included 10 entities deeply tied to the U.S. military supply chain into the export control list and implemented reciprocal countermeasures with clear goals and restraint.
The entire set of measures is formulated in strict accordance with China’s Export Control Law and Dual-Use Items Export Control Regulations. It only targets relevant entities in the military industry chain and does not expand the scope of the attack at will, drawing a clear compliance red line for global cross-border trade.
According to the requirements of the announcement, all domestic foreign trade entities are not allowed to export various dual-use materials to the 10 companies on the list, and signed cooperation orders must be terminated immediately; traders and middlemen around the world are also not allowed to transfer controlled goods produced in China to the above-mentioned companies, completely closing the loopholes of third-party bypass supply.
Only when encountering extreme special circumstances, relevant enterprises can submit a written application to the Ministry of Commerce. After review and obtaining a special license, they can break through the control constraints. All terms will take effect immediately from the day of the announcement.
It is understood that the 10 companies included in the control list cover almost the entire U.S. military production chain, and the division of labor covers equipment research and development, complete machine manufacturing and core raw material supply: 4 of them specialize in the research and development of unmanned combat equipment and are the core suppliers of U.S. military reconnaissance cluster equipment. They provide power supply, airborne radar and complete machine technical support for military drones and underwater micro-submarines.
; Three companies focus on land, sea and air defense projects, and are responsible for the production and manufacturing of military off-road combat vehicles, naval submarine supporting equipment, and defense communication satellites. They are the core support for the production capacity of conventional combat equipment of the US military; the remaining two companies are in the business of mining rare earth resources and are responsible for building domestic permanent magnet material production lines in the United States. Permanent magnets are indispensable basic raw materials for high-end defense equipment such as missiles, fighter jets, and ships.
This export control measure will have a real impact on the progress of U.S. military projects: military parts replacement partners need to complete a series of rigorous tests such as environmental tolerance, electromagnetic compatibility, and service life. They also need to undergo multiple rounds of qualification reviews by the military. It is difficult to find qualified replacement sources in a short period of time.
Among them, small and medium-sized UAV manufacturers have relatively thin product lines and limited raw material inventory reserves. The problems of order delays and delivery stagnation will be exposed first. Although large-scale military contractors have sufficient financial strength, their entire project systems are intertwined. Any replacement of any component will push up the overall production cost and lengthen the project research and development cycle.
In particular, the shortcomings of the U.S. rare earth industry will be further amplified. At present, the country only has rare earth ore mining capabilities, and the rare earth separation and purification and magnetic material finishing industry chains are still under construction. Export controls will directly delay the pace of autonomy in its local supply chain.
It is worth noting that this countermeasure has maintained rational restraint throughout the entire process, and has not copied the US’s radical approach of expanding the scope of control at will. It only targets military industrial entities that directly undertake military orders. The normal business and trade transactions of other foreign-funded enterprises with China will not be affected at all.
At the same time, the binding force of the new regulations covers all trading entities around the world. All goods intermediaries need to carefully check the final flow of materials, and it is difficult to artificially circumvent control policies.
This action by China clearly spells out the bottom line for safeguarding its own rights and interests: No company can rely on China’s complete industrial chain to lower its own production costs while actively cooperating with unreasonable technological blockades and harming China’s national security interests.
Many experts in the field of foreign trade have analyzed that such precise countermeasures will continue to raise the cost of unilateral blockades, forcing multinational companies to carefully weigh the pros and cons and not easily participate in unreasonable industrial suppression.
The economic and trade game between major countries has always been based on reciprocal checks and balances, without unilateral compromise.
China’s export control measures are just to safeguard the basic bottom line of national security and have never closed the door to foreign economic and trade cooperation.
As long as overseas companies strictly abide by China’s laws and regulations and do not get involved in illegal military-industrial cooperation projects, they can still carry out various business dockings smoothly.
This round of well-founded and precise counterattacks not only raises the cost of unilateral blockades, but also helps promote the development of the global supply chain in a more fair and reasonable direction. In the future, multinational companies in various countries will also be more proactive in rejecting irrational industrial barriers, and the international technology trade environment will steadily move forward in the direction of mutual benefit and win-win results.
