New Delhi: The United States has added new companies on the list of those which it considers as “Communist Chinese companies” and has found evidence that shows them to be either owned or controlled by the Chinese People’s Liberation Army (PLA).
Notably, almost all these companies are either operating in India or are working to make an entry.
The companies that are on the US list are now open to various levels of sanctions under the Executive Order 13959, signed on 12 November 2020 by US President Donald Trump, which addresses the “Threat From Securities Investments That Finance Communist Chinese Military Companies”. Apart from these companies not being allowed to operate in the US, their business dealings with countries that are considered as close US allies, including India, are also likely to be affected in the coming weeks. In the last couple of years, India has signed multiple high-value strategic and defence deals that allow it to use sophisticated US assets like never before.
In the recently released list, that was made public on 28 December, by the Office of Foreign Assets Control (OFAC), which is a financial intelligence and enforcement agency of the US Treasury Department, a total of 35 Chinese companies have been identified as entities who are closely working with the PLA.
The names of these companies are Aero Engine Corporation of China, Aviation Industry Corporation of China (AVIC), China Academy of Launch Vehicle Technology (CALT), China Aerospace Science and Industry Corporation (CASIC), China Aerospace Science and Technology Corporation (CASC), China Communications Construction Company (CCCC), China Construction Technology Co. Ltd. (CCTC), China Electronics Corporation (CEC), China Electronics Technology Group Corporation (CETC), China General Nuclear Power Corp, China International Engineering Consulting Corp. (CIECC), China Mobile Communications Group, China National Chemical Corporation (ChemChina), China National Chemical Engineering Group Co., Ltd. (CNCEC), China National Nuclear Corporation, China National Offshore Oil Corporation (CNOOC), China North Industries Group Corporation (Norinco Group), China Nuclear Engineering & Construction Corporation (CNECC), China Railway Construction Corporation (CRCC), China Shipbuilding Industry Corporation (CSIC), China South Industries Group Corporation (CSGC), China Spacesat, China State Construction Group Co., Limited, China State Shipbuilding Corporation (CSSC), China Telecommunications Corporation, China Three Gorges Corporation Limited, China United Network Communications Group Company Limited, CRRC Corporation, Dawning Information Industry Co (Sugon), Hangzhou Hikvision Digital Technology Co., Ltd. (Hikvision), Huawei, Inspur Group, Panda Electronics Group, Semiconductor Manufacturing International Corp. (SMIC) and Sinochem Group Co Ltd.
A majority of the companies mentioned in the list, including the much talked and written about Huawei, have a sizable presence in India.
A few days ago, the Competition Commission of India (CCI) allowed the merger of Sinochem Group Company Ltd and China National Company Corporation Ltd. In India, Sinochem and ChemChina compete for the sale of formulated crop protection products like herbicides, insecticides, fungicides and bio-stimulants in India.
Early this year, China’s largest mobile operator, China Mobile Communication Group, had held early-stage talks with telecom service providers Bharti Airtel Ltd and Vodafone Idea Ltd to jointly develop a cloud network here as the Chinese telecom joint was keen to enter the Indian market.
Inspur group, which is China’s leading cloud computing, is operating in India through its subsidiary, Inspur Technologies India Pvt Ltd. Another company on the list, Hikvision, operates in India under the name of Prama Hikvision Indian Private Limited.
CRRC Corp had opened its first joint venture manufacturing plant in India in August 2016, named CRRC Pioneer (India) Electric Co Ltd, which is housed in Bavo Industrial District, Haryana. It was the first foreign company to set up a rail vehicle assembly plant in the country.
China Telecommunications Corporation’s subsidiary in India is listed as China Telecom (India) Private Limited and it was incorporated on 8 November 2012 and it is involved in “Legal, accounting, book-keeping and auditing activities; tax consultancy; market research and public opinion polling; business and management consultancy”.
The Executive Order, signed by Trump, had stated that the Chinese companies were financially helping the Chinese PLA. “The Key to the development of the People’s Republic of China (PRC) military, intelligence, and other security apparatuses is the country’s large, ostensibly private economy. Through the national strategy of Military-Civil Fusion, PRC increases the size of the country’s military-industrial complex by compelling civilian Chinese companies to support its military and intelligence activities. Those companies, though remaining ostensibly private and civilian, directly support the PRC’s military, intelligence, and security apparatuses and aid in their development and modernization. At the same time, those companies raise capital by selling securities to United States investors that trade on public exchanges both here and abroad, lobbying United States index providers and funds to include these securities in market offerings, and engaging in other acts to ensure access to United States capital. In that way, the PRC exploits United States investors to finance the development and modernization of its military,” reads the EO.