China hits back at U.S. sanctions on tech giants, restricting its exports to American defense firms

BEIJING (AP) — China on Monday announced sanctions on 10 American military-related companies in response to a recent U.S. move that bars some leading Chinese tech companies from defense contracts.

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The Commerce Ministry said that Chinese companies would be blocked from exporting “dual-use” items to the 10 companies, which include military drone makers and some involved in rare earth mining. Dual use refers to goods that can have military as well as non-military applications.

The ministry said the export ban was both to safeguard China’s national security and in response to what it called the U.S. government’s “wrongful expansion of its so-called List of Chinese Military Companies.”

George Chen, partner for Greater China at the advisory firm The Asia Group, said the ban was an unsurprising and proportionate response to the U.S. restrictions.

“Most of them are U.S. defense industry players or they have close connections with the U.S. government for contracts and other reasons,” he said. “Those companies are not going to do business in China, so the impact will be quite symbolic.”

Separately, the Finance Ministry said that government entities would be prohibited from buying products from 46 American companies including multiple units of Lockheed Martin, Raytheon and General Dynamics. A brief statement did not give any reason for the prohibition.