Illustration: Xia Qing/GT

The Ministry of Commerce announced on Friday that China will create an "unreliable entity list" to include foreign entities and individuals that block or cut supplies to Chinese companies, take discriminatory measures for non-commercial reasons or whose actions endanger the business of Chinese companies and China's national security. 

China's list came out as the US blacklisted some high-tech companies including Huawei, but it is more than just a retaliatory method. The unreliable entity list system is not only meaningful for protecting the rights of Chinese companies and a major contribution toward a more reasonable global governance system, but also a strong hit back against the "American Trap"designed to harm foreign companies described by French executive Frederic Pierucci in his book by the same name.

The entity list has dealt a blow to the"American Trap,"a term Pierucci, an executive of French multinational Alstom, uses to describe how the US employs its so-called "extraterritorial action" to block foreign companies that may compete with US firms by threatening to cause maximum damage to force foreign companies to surrender. The book has caused a sensation since it was published. 

The stubborn and arrogant measures by the US are a huge insult to and  will undermine the market's rule of law. The country's arrogant hegemony has turned some multinational companies into its accomplices, voluntarily or involuntarily, infringing upon the interests of their business partners around the world.

The unreliable entity list China has issued is based on the country's laws on foreign trade, antitrust and national security. It targets those who pose harmful threats to Chinese companies, industries and national security. Enabling the list has declared the Chinese stance on the "American Trap" and also serves as a warning in case the US decides to continue its scheme.

The "unreliable entity list" system is a countermeasure against the protectionism and populism that have permeated worldwide. So far, the world economy faces a great deal of uncertainty with increasing numbers of unstable factors. Unilateralism and protectionism are challenging the world's multilateral trade system and disturbing international trade activities. Some foreign entities, for reasons that have nothing to do with business, have tried to undermine not only China's interests and security, but also the global industrial and  supply chain and, ultimately, the world economy. In this sense, the unreliable entity list will safeguard the global trade and economic rules and multilateral mechanisms against the backsliding of unilateralism and protectionism.

The list will clearly distinguish foreign companies that harm Chinese national security, public interest and companies' rights. It shows China's determination to continuously open up, improve transparency and cultivate a business environment with the rule of law. China has insisted on opening-up and multilateralism through action.

The "unreliable entity list" is conducive to dissolving structural problems of global economic governance. After World War II, the US created the world trade system and its clearing system. Moreover, the US holds control of the internet's root name servers and global intelligence network. Companies in other countries have to obey the US-dominated international trade rules and are subject to discipline and punishment at the will of the US, unless they want to be stuck with low-end trade. 

The US accusations against Chinese companies such as ZTE and Huawei stem from this kind of institutional hegemony. As globalization goes deeper, developing countries' economies have grown stronger, and this change of strength is reflected as a structural conflict in global governance. The appeals of developing countries are not easily addressed within a global governance system dominated by developed countries.

Therefore, the list also shows China's attitude toward the current global economic governance structure - developing countries will not concede without a bottom line or fall for the discourse of developed countries. After combining their common interests, developing countries will be a positive force for a just and fair global governance system.

The author is an associate research fellow at the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce. bizopinion@globaltimes.com.cn