Some, especially governments, live by a “tit for tat” philosophy so it’s really no surprise that China wants to hit the US back. The latter has not only extended Huawei’s fate as part of the government’s entity list, the US Department of Commerce has also made moves to deprive the phone maker of much-needed access to semiconductors for its processors. Since negotiations seem to have broken down, China is now threatening to respond in kind and put US companies on its own upcoming “unreliable entity list”.
Just as with the US’ entity list, the Chinese version will target foreign entities that it thinks undermine the legitimate interests of local companies. Given the Chinese government’s track record, this can mean anything from foreign companies that compete with local counterparts to those that criticize or try to weaken the socialist regime.
According to sources, Apple, Qualcomm, Cisco, and Boeing are some of the big names that are close to being on that list, US companies that have a great dependence on the Chinese market to some extent. For years, Apple has been wooing Chinese consumers, going as far as making concessions just for that market. Qualcomm’s Snapdragons are the most widely-used processors for mobile phones even in China.
Being put on that “unreliable entity list” could mean different things for different companies, not least of which would be imposing restrictions on operations or sales. The Chinese government could also launch investigations into these company’s anti-competitive practices. It could also stop purchases of Boeing planes.
Beijing’s latest threat comes after the US Commerce Department announced rules that limit US companies from supplying semiconductors, parts, and processor designs either directly to Huawei or its affiliates or even to third-parties if they know it will end up in Huawei’s hands. This would, in effect, prevent Taiwan-based TSMC from buying US supplies for chips it would fabricate to make HiSilicon’s Kirin chips that, in turn, drive Huawei’s Qualcomm-free phones.