China warned tech companies of consequences for cooperating with US ban

Chinese governmental officials reportedly warned numerous tech companies of “dire consequences,” should they cooperate with a US ban against doing business with Chinese tech firm Huawei, according to a report in The New York Times. The move comes after China threatened to set up a blacklist of “unreliable entities” in retaliation for the ban.

The officials warned US firms against relocating their production lines to other countries, from following orders against doing business with specific companies, and that they should lobby against the Trump Administration’s efforts, saying that their actions could have permanent consequences. Non-US companies were reportedly told that if they continued to supply Chinese firms, they wouldn’t face such consequences. But the Times notes that US firms will likely won’t be effective, as such companies won’t want to incur legal trouble from breaking the law.

The Times reports that the warnings came in a series of meetings held earlier this week by members of China’s National Development and Reform Commission, along with members of the Ministry of Commerce and Ministry of Industry and Information Technology, before a “broad range of companies that export goods to China,” according to a pair of individuals who were familiar with the talks. It’s not clear what companies were present at the meetings, other than that they “included a number of the world’s most important semiconductor firms, as well as other tech giants.”

In May, the White House issued an executive order that allows federal government to ban US companies from purchasing equipment from companies deemed a risk to national security.

The order is aimed squarely at Huawei, which national security officials have warned presents such a threat to US security, and who have put pressure on allied countries from using the company’s equipment as they upgrade their telecommunications infrastructure. The order has prompted tech companies like Google, Microsoft, ARM, and others to stop selling supplies to Huawei.

That move come amidst growing tensions between Washington and Beijing as the two countries have leveled tariffs against one another as part of the ongoing trade war. Talks have stalled lately, although President Donald Trump and Chinese President Xi Jingping are expected to meet later this month at the G20 summit in Japan.

Credit by New York Times.