US President Donald Trump is inflicting more pain on China before he leaves office. The Trump administration will soon issue a fresh list of Chinese companies that have links with the People's Liberation Army (PLA).
Besides the Chinese companies, the draft list also includes the names of 28 Russian entities that the US government thinks are 'military end users'.
The Commerce Department said it was acting to ensure there is control over the flow of U.S. technology to the foreign companies in order to "protect US national security interests," Reuters reported.
The list, produced by the US Department of Commerce, has names of as many as 89 Chinese aerospace and other companies. If the US goes ahead and publishes the list, these companies will be prohibited from buying US goods and technology.
Such a move will exacerbate the trade tensions between the world's largest two economies, besides hitting US companies that sell civil aviation parts and components to China.
Which are Main Chinese Companies on the List?
One major Chinese company designated as 'military end user' in the list is Commercial Aircraft Corp of China Ltd (COMAC). Interestingly, COMAC is being projected by Beijing as a future rival for aircraft manufacturing giants like Boeing and Airbus. Another company on the list is Aviation Industry Corporation of China (AVIC) and its various related entities.
The Move Could Backfire on Boeing
Industry watchers have warned that if the US presses ahead with the publication of the list, China could retaliate in multiple ways.
One of the early casualties in that war of attrition would be US giant Boeing, which just last week managed to get US regulatory approval for taking its 737 MAX planes back on air. Boeing is seeking similar approval in China but this could be denied if the list is published. China had grounded 737 Max last year, as did most countries around the world, following two fatal crashes involving the jetliner.
Boon for Europe?
Industry watchers told Reuters that the Trump administration's move could invariably boost European competitors in the civil aviation sector. When Chinese companies are precluded from business with the US companies they would flock to European rivals, giving an edge to companies like Airbus.