No deal forthcoming under duress

The US Department of Commerce said on Tuesday that it will add China General Nuclear Power Group, the country’s largest State-owned nuclear company, to its Entity List — which means US companies will be prohibited from selling products and technologies to the Chinese enterprise.

The US has accused CGN of diverting technologies for military use, but that is just an excuse. The real aim is to try to thwart the country’s “Made in China 2025” initiative that seeks to let Chinese manufacturing move up the value chain, and thus contain its growth.

For that purpose, the US administration has abused the blacklist in the name of safeguarding US national security and foreign policy interests, and imposed technology sanctions on dozens of Chinese companies, including telecommunications equipment giant Huawei.

The restrictions have disrupted global supply chains and harmed the interests of not only the target Chinese companies but also US companies, given the technology interdependence that exists globally.

It remains in doubt to what extent the US

sanctions will succeed in denting China’s technological edge, which has been built over the years through the Chinese people’s hard work, innovative spirit and self-reliance. Actually most Chinese companies have already prepared for the worst since the onset of the trade war. Shortly after being put on the US blacklist, Huawei unveiled its own operating system, Harmony, in a major push to build its own software ecosystem.

As for CGN, in response to the latest US move, it said on Thursday the damage it will do to its development is “controllable”.

The latest sanctions on CGN are especially illtimed given that Chinese and US trade negotiators have just agreed to talk again within two weeks. The talks have already been stalemated because the US agreed to a deal, then decided it wanted more, threatening new tariffs to try and force acceptance of its fresh demands.

History shows “maximum pressure” will only make China more determined to defend its interests, and it will take counter-measures as necessary. The US would do well to de-escalate the heightening tensions if it really wants to strike a deal.