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Pentagon releases list of Chinese Communist Party-tied companies in the US

A staff member of Huawei uses her mobile phone at the Huawei Digital Transformation Showcase in Shenzhen, China's Guangdong province on March 6, 2019. Chinese telecom giant Huawei announced a revenue of more than $120 billion. (Wang Zhao/AFP/Getty Images)(TNS)
July 06, 2020

Last month, the Department of Defense released a list of companies believed linked to the People’s Liberation Army, the armed forces of the Chinese Communist Party.

Twenty Chinese companies operating in the United States made the list, including Huawei and Inspur Group.

Sen. Marco Rubio, the chairman of the Senate Intelligence Committee, told the Washington Examiner that the list should be viewed as a warning for the American people.

“The list put out…by the Pentagon is a start but woefully inadequate to warn the American people about the state-owned and state-directed companies that support the Chinese government and Communist Party’s activities threatening U.S. economic and national security,” Rubio said. “The list only touches the surface of the Chinese government’s exploitation of U.S. capital markets. It’s critical that American institutional and retail investors know which companies are involved not only with the Chinese Communist Party’s military but also with its espionage, human rights abuses, ‘Military-Civil Fusion Strategy’ and ‘Made in China 2025’ industrial policy.”

The designation is part of the 1999 National Defense Authorization Act that requires the Pentagon to create the list in an effort to monitor Chinese companies in the U.S. It also gives President Trump “the power to invoke emergency economic powers granted to him under the International Emergency Powers Act of 1977, including sanctions, against the Chinese military-linked companies,” the Washington Examiner reported.

The 1999 law was passed following China’s admission to the World Trade Organization. The law was designed to make sure Chinese companies working for the PLA did not have “free rein” in using access to the U.S. to build up China’s military strength.

The law requires the defense secretary to “make a determination of those persons operating directly or indirectly in the United States. Or any of its territories and possessions that are Communist Chinese military companies” and to “publish a list of those persons in the Federal Register.”

While the law states that the Pentagon is to make additions or deletions to the list on an ongoing basis, June marks the first time the list has been created and released in 20 years.

According to the Washington Examiner, Secretary of Defense for Public Affairs Jonathan Hoffman “hinted…that this was just the beginning.”

“As the People’s Republic of China attempts to blur the lines between civil and military sectors, ‘knowing your supplier’ is critical,” Pentagon officials told the Washington Examiner. “We envision this list will be a useful tool for the U.S. government, companies, investors, academic institutions, and likeminded partners to conduct due diligence with regard to partnerships with these entities, particularly as the list grows.