The US Department of Defense (DOD) has decided to blacklist more Chinese companies as the US-China rivalry intensifies.
The largest drone manufacturer in the world, DJI, is among the list’s notable participants. 13 businesses have been put on a blacklist by the Pentagon because of their ties to the Chinese military.
47 companies were on the previous list, including Huawei.
The DoD’s charges, according to Chinese media, are unfounded and unjustified because DJI’s products are not intended for military use.
In accordance with Section 1260H of the William M. Thornberry National Defense Authorization Act for Fiscal Year 2021, the Pentagon has placed 13 Chinese companies on a blacklist.
They were referred to as “Chinese military companies” by the DOD. According to the department’s press release, it is committed to exposing and undermining China’s military-civil fusion strategy.
The second group of blacklisted companies is represented here.
The US Government came heavy on DJI
Beijing Kownsec, BGI Genomics, China International Engineering Consulting Corporation, China National Chemical Corporation, China National Chemical Engineering Group Corporation, and China State Construction Group are among the 13 Chinese firms that the Pentagon has blacklisted.
The list also includes 360 Security Technology, DJI Innovation Technology, CRRC Corporation Limited, Dawning Information Industry, Global Tone Communication Technology, Shenzhen DJI Innovation Technology, and DJI.
According to a statement from the Department of Defense, the military-civil fusion strategy “supports the modernization goals of the People’s Liberation Army (PLA) by ensuring its access to advanced technologies and expertise are acquired and developed by PRC companies, universities, and research programs that appear to be civilian entities.”
DJI has consistently been viewed by the Pentagon as a danger to US national security. The company’s shares were prohibited from trading by the Treasury Department last year due to the company’s alleged involvement in the surveillance of the Uighur ethnic minority.
Other well-known companies on the list include the gene testing business BGI Genomics, the rolling stock producers CRRC Corp., and the surveillance business Dahua Technology.
The government imposed a ban on 47 businesses in June of last year
13 Chinese companies have most recently been added to a blacklist as part of an ongoing campaign that started in June 2021.
The government imposed a ban on 47 businesses in June of last year, including semiconductor producer SMIC and tech giant Huawei.
During the administration of President Donald Trump, the US government started taking action against Chinese corporations, and President Joe Biden has since done the same.
From defense to technology, the US government has been attempting to compete with China. Investors are being cautioned by the DOD’s blacklisting to steer clear of the companies on the list.
China claims that the crackdown is intended to slow China’s technological ascent.
The action could be interpreted as an intricate US strategy to compete with China.
DJI’s global market share decreased to 54% last year from 69% in 2020
DJI’s global market share decreased to 54% last year from 69% in 2020, according to DroneAnalyst. Autel came in second place with a 7% market share, followed by Skydio and Parrot, each of which had 3%. Chinese company DJI’s Mavic quadcopter drone has evolved into a true icon of contemporary warfare. According to retired Russian army general Yuri Baluyevsky, who made the statement in mid-August. In a statement, DJI made it clear that none of its products are intended for military use and that they are all created with civilian needs in mind.
The majority of Chinese columnists who responded concurred that China is falling behind the US in the production of powerful drones and pilotless aircraft. However, they also thought that China would continue to dominate the civilian drone market in the foreseeable term.
Impact on the Companies due to the ban
It is important to examine this DOD move’s effects on Chinese companies from a variety of perspectives. This has an impact on these companies’ prospects in the US, to start with. There is very little American direct investment in Chinese companies. However, more research is required to determine how the moratorium may affect indirect investment. Other US federal offices will impose restrictions after the blacklisting.
Remedies available for the banned companies
The blacklisted companies can always file a lawsuit in the US to get the ban lifted. Following this route, the smartphone giant Xiaomi came out successfully in May 2021. The government was mandated by a court to remove Xiaomi from the prohibited list. Later, the business and the government came to an arrangement.