Yaguang Technology Group Co Photo: VCG

The latest moves by the US Commerce Department, which added more Chinese companies to its "entity list" citing so-called national security concerns, lack a factual basis and transparency, a Chinese expert said on Monday, noting that these actions are politically motivated, risk disrupting global supply chains, and undermine market balance and stability.

The remarks were made after the US Bureau of Industry and Security (BIS), under the Department of Commerce, announced on Friday its decision to amend the Export Administration Regulations by adding 13 entities from China, Myanmar and Pakistan to the "entity list." Among them, 11 companies are based in China.

The BIS claimed that "these entities are added for acquiring and attempting to acquire US-origin items in support of China's military modernization."  In addition, "these entities have demonstrable ties to activities of concern" that are "contrary to the US national security and foreign policy interests," per the BIS.

Zhou Mi, a senior research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Monday that the list, which is politically driven, will backfire on US companies as they risk losing their developmental foundation and essential support systems without Chinese companies.

"The global competitive edge of Chinese companies lies not only in their cost-effectiveness but also in their resilience, including supply chain and adaptability to market changes... It is precisely because of the critical role Chinese enterprises play in global supply chains that innovation-driven companies, including those in the US, can transform technology into marketable products more effectively," Zhou further noted.

Zhou said that the sanctions will drive Chinese businesses to diversify their cooperation channels, including domestic substitutions, thereby reducing or even replacing some US-related production links.

In response to the US decision, China's Yaguang Technology Group Co, which is one of the companies included on the list, said in the public notice on Monday that the company's current production and operations remain normal.

The core technologies involved in the company's products are built on in-house research and development (R&D) as well as proprietary patents, ensuring the independence, integrity and reliability of the company's operations and products, it said.

The company said it will continue to monitor and follow up on the development of subsequent events, further analyze and evaluate the potential impact on the company, and maintain communication with all relevant parties to carry out necessary responses.

Chinese Chengdu RML Technology Co said on Monday that being included in the "entity list" will have no substantive impact on the company's operations. The company said that it has established an independent and comprehensive system encompassing R&D, production, supply chain management, and intellectual property, enabling it to achieve high-quality and sustainable growth.

Another Chinese company included in the list told the Global Times on Monday, on condition of anonymity, that it had noted the move by the US and would evaluate its response, without providing further details.

The updated list came just few weeks after the US Commerce Department announced it was adding two Chinese companies to a trade restriction list for allegedly enabling so-called human rights violations. The allegation was immediately dismissed by one of the corresponding Chinese companies, saying the decision lacked a factual basis.

These measures bring no benefits to the US and risking a loss for American businesses in their attempts to "decouple" from China, said Li Yong, a senior research fellow at the China Association of International Trade. It is evident that faced with US technological blockades and suppression, Chinese companies have significantly increased investment in independent research and development in recent years, Li said, noting that holding back China in the tech race is a "fool's errand."