Cut Chinese firms in eye of the storm a break: Global Times editorial

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Source: Global Times

Photo: IC

According to Reuters, Chinese leading chipmaker Semiconductor Manufacturing International Corporation (SMIC)’s “relationship to the Chinese military is under scrutiny,” and it may be added to a US trade blacklist. SMIC issued a statement on Saturday, stressing it has “no relationship with the Chinese military” and its products are “solely for civilian and commercial end-users and end-uses… Nevertheless, SMIC is open to sincere and transparent communication with the US Government agencies in hope of resolving potential misunderstandings.”

SMIC’s statement, however, drew quite a few criticisms on the Chinese internet. Many netizens believe the response is too weak. Some even say that as a Chinese company, it would be dignified and upright even if the company does have a relationship with the Chinese military.

The US is hinting that investigations will be carried out over whether to place SMIC on the entity list. This is the latest threat from the US against Chinese companies. SMIC was founded in 2000 with a complicated background of its shareholders, some of whom are from foreign countries. US government is obviously going out of their way to find fault by questioning the company’s ties with the Chinese military. So far, the US has placed over 300 Chinese entities on its blacklist, and it evidently intends to use the list more widely to crack down on Chinese high-tech firms. It is thus not surprising that the US would pick on SMIC as a new target.

Since 2018, when the US suppressed Chinese tech company ZTE for alleged violation of US sanctions on Iran, the US has been imposing sanctions on Chinese companies at its whim with less and less legal support needed. So-called national security and human rights are used as justification to add Chinese companies to its blacklist. Paralyzing China’s research, development, and manufacture of high-tech products has become the US’ ultimate goal to frame and contain Chinese enterprises.

On the other hand, as the list gets longer, upstream high-tech companies in the US are confronting serious declines in terms of economic benefits. Therefore, resistance exists in the US’ business community in the face of such reckless decoupling while there are twists and turns in the US’ own decision-making and executive process in this regard.

When Chinese netizens see the companies of their own country are being cracked down on, they feel angry about the US’ bullying. Meanwhile, they sigh and feel frustrated over the fact that China’s scientific and technological strength are not strong enough that some key technologies are restricted by the US. It is understandable that some people hope to see a tough response from Chinese companies.

US sanctions cause different losses to different Chinese companies. Washington is unable to kill all Chinese high-tech enterprises with a single entity list. But at the same time, sanctions have caused difficulties for certain companies. Under such circumstances, it is believed that the Chinese enterprises concerned should respond in the way that they think is most beneficial to their own interests based on their own situations. This is their right. Chinese high-tech companies are at a disadvantageous position in the China-US strategic competition. This is the reality that we must face up to. We cannot force the enterprises to act in the way that is most in line with national interests, which will cause unbearable consequences to them.

The general development goals of Chinese companies are consistent with China’s national development. But survival and development are the main goals that enterprises must achieve under the current complicated environment. They must first ensure these goals before talking about others. The interests of enterprises and the country cannot completely overlap. Besides, enterprises should first of all serve customers rather than please the public. We need to figure out these issues rationally.

It is often said that becoming stronger is the fundamental solution for China to deal with the strategic challenges of the US, while the key to making the country stronger is strengthening enterprises. China’s position in the global supply chain only can be gradually improved by developing its companies one by one. But facing the US’ strategic suppression, Chinese companies at the forefront have been the canaries in the coal mine targeted by the US. They have to bear the greatest burden in this round of China-US competition.

The US has no sympathy for Chinese companies. In particular, Washington wants to kill those in the forefront. At such a time, we must sympathize with those Chinese companies, offer more support and tolerance to them, rather than putting rigorous demands on them. Chinese society as a whole needs to have such a broad mind-set. When some Chinese enterprises feel aggrieved and are suppressed abroad, they should be neither spat on nor whipped by the domestic society.

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