US LIM­ITS TECH EX­PORTS TO CHI­NESE FIRM ON SE­CU­RITY GROUNDS

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The Trump ad­min­is­tra­tion has im­posed re­stric­tions on tech­nol­ogy ex­ports to a state­sup­ported Chi­nese semi­con­duc­tor maker, cit­ing na­tional se­cu­rity grounds amid a mount­ing tar­iff bat­tle.

The con­trols im­posed Mon­day on Fu­jian Jin­hua In­te­grated Cir­cuit Co. re­flect con­cern Chi­nese com­pe­ti­tion could drive Amer­i­can tech­nol­ogy sup­pli­ers out of busi­ness, leav­ing the mil­i­tary with­out se­cure sources of com­po­nents.

Bei­jing has spent heav­ily to build up Jin­hua and other chip mak­ers as part of ef­forts to trans­form China into a global leader in ro­bot­ics, ar­ti­fi­cial in­tel­li­gence and other tech­nol­ogy in­dus­tries.

The United States, Europe and other trad­ing part­ners say Bei­jing’s tac­tics vi­o­late its mar­ke­topen­ing obli­ga­tions. Amer­i­can of­fi­cials worry they might erode U.S. in­dus­trial lead­er­ship.

Pres­i­dent Don­ald Trump has im­posed tar­iffs of up to 25 per­cent on $250 bil­lion of Chi­nese goods in an ef­fort to pres­sure Bei­jing to roll back those plans.

Jin­hua is com­plet­ing “sub­stan­tial pro­duc­tion ca­pac­ity” for in­te­grated cir­cuits, pos­si­bly us­ing U.S. tech­nol­ogy, which “threat­ens the long-term eco­nomic vi­a­bil­ity of U.S. sup­pli­ers of these es­sen­tial com­po­nents of U.S. mil­i­tary sys­tems,” said a Com­merce Depart­ment state­ment.

The com­pany was added to the depart­ment’s “En­tity List,” which will re­quire it to ob­tain an ex­port li­cense for all soft­ware, tech­nol­ogy and com­modi­ties, the Com­merce Depart­ment said. It said such ap­pli­ca­tions “will be re­viewed with a pre­sump­tion of de­nial.”

That “will limit its abil­ity to threaten the sup­ply chain for es­sen­tial com­po­nents in our mil­i­tary sys­tems,” Com­merce Sec­re­tary Wil­bur Ross said in the state­ment.

China’s for­eign min­istry said it hoped for­eign gov­ern­ments would treat Chi­nese com­pa­nies “rea­son­ably and fairly.”

“We hope the United States will do some­thing that serves the two sides’ in­ter­est and helps im­prove mu­tual trust, in­stead of the other way around,” said a min­istry spokesman, Lu Kang.

Calls to Fu­jian Jin­hua’s of­fices rang unan­swered Tues­day and there was no im­me­di­ate re­sponse to an in­quiry made through their web­site.

The or­der marks the sec­ond U.S. ac­tion this year block­ing tech­nol­ogy ex­ports to a Chi­nese buyer.

ZTE Corp., China’s sec­ond-big­gest maker of tele­coms equip­ment, faced pos­si­ble bank­ruptcy this year af­ter Wash­ing­ton im­posed a seven-year ban on sales of U.S. tech­nol­ogy to the com­pany over its ex­ports to Iran and North Korea.

Amer­i­can author­i­ties lifted the ban in July af­ter ZTE paid a $1 bil­lion fine, agreed to re­place its ex­ec­u­tive team and hired U.S.-se­lected com­pli­ance of­fi­cers.

Mean­while, Jin­hua is em­broiled in a court bat­tle with U.S. chip maker Mi­cron Tech­nol­ogy Inc., which ac­cuses the Chi­nese com­pany of steal­ing its tech­nol­ogy.

Mi­cron sued Jin­hua in De­cem­ber in fed­eral court in Cal­i­for­nia. Jin­hua sued the U.S. com­pany the fol­low­ing month in a Chi­nese court and ob­tained an or­der block­ing sales of some Mi­cron prod­ucts.

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