BUSINESS Chinese chipmaker SMIC says US blacklisting has no major impacts

BUSINESS

Chinese chipmaker SMIC says US blacklisting has no major impacts

Global Times

16:40, December 04, 2020

An employee of Semiconductor Manufacturing International Corp works at the company's factory in Beijing. (File photo: Xinhua)

China's leading chipmaker Semiconductor Manufacturing International Corporation (SMIC) said on Friday that the US' blacklisting would not result in any major impacts on its operations and denied US allegations over its relationship with the Chinese military.

The US Department of Defense on Thursday added SMIC and three other Chinese companies - China Construction Technology Co., China International Engineering Consulting Corp. and China National Offshore Oil Corporation - to a list of companies it deems to have so-called links to the Chinese military.

While the blacklisting of the four companies does not result in any immediate, specific actions against them, earlier policies issued by Donald Trump would prevent US investors from buying stocks of the listed companies starting in 2021, according to media reports.

Following the news, the company's Hong Kong-listed shares plunged by 2.25 percent in early morning trading before it was suspended. But the company said that share trading would resume in the afternoon.

The company's shares on the Chinese mainland also fell by 3.62 percent around noon on Friday.

In a separate statement on Friday morning, SMIC said it was still evaluating any potential impacts of the move on its operations and urged investors to be aware of the risks when investing in the company's stocks.

SMIC has repeatedly denied US allegations over its relationship with the Chinese military. "The company has no relationship with the Chinese military and does not manufacture for any military end-users or end-uses," it said in a statement sent to the Global Times last week.

"This is just another example that certain 'radical elements' within the US government are using the last days of the Trump administration to crack down on Chinese companies in a crazy manner; not just to attack China, but actually to make trouble for the incoming administration," Mei Xinyu, a research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Friday.

In addition to the blacklisting of the four Chinese companies by the US Defense Department, the US Congress passed a legislation that could push out several Chinese companies from the US stock exchanges. It is pending a signature from Trump.

Also on Friday, US media outlet AXIOS reported that the US Department of Commerce has drafted a plan to restrict US providers from doing business in certain countries (like China) and ban US consumers from using cloud services provided by companies from certain countries.

"I feel all of these may be aimed at China but they actually punish US businesses and consumers, because these actions will hurt Chinese companies as much as the US' own interests," Mei said.

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