US President Joe Biden has added more Chinese companies and individuals to an export blacklist than any US administration, as growing frictions between the world’s biggest economies continue to complicate global trade.

The Commerce Department added six Chinese companies to its entity list on Thursday, bringing the tally of new targets during the Biden administration to 319. That compares with the 306 entities added during Donald Trump’s time in the White House, when he oversaw a trade war with Beijing that hurt both countries’ economies.

The milestone exemplifies how the US government is increasingly using economic tools to achieve foreign policy goals, as Biden tries to kneecap China’s access to cutting-edge chips and technology, citing national security concerns. President Xi Jinping’s growing assertiveness towards Taiwan, which he claims as part of China’s territory, has increased concerns in Washington that Beijing will use American technology to advance its military prowess.

“Being tough on China, including through the restriction of its access to technology, is a theme that has bipartisan agreement,” said Alfredo Montufar-Helu, the head of the Conference Board’s China Center. With a US election in November, both sides “have incentives during these months of campaigning to show themselves as being as strong on China”, he said.

Biden has left in place Trump’s tariffs while adding to those measures, with a specific focus on curbs that block Beijing’s access to innovations capable of a wide swathe of applications, including those in the critical artificial intelligence (AI) sector.

In February, the US added eight companies to the entity list, quietly taking Biden past Trump’s record, with six more added this week. The entity list has increasingly become one of Washington’s main weapons for sanctioning and punishing people, companies or other organisations in China and elsewhere on national security grounds.  

Beijing has branded that policy an attempt to thwart its development. Imposing export controls on Chinese companies “is typical economic coercion and unilateral bullying behaviour”, He Yadong, a spokesman for the Chinese Ministry of Commerce, said at a briefing in Beijing on Thursday when asked about the latest US actions. 

“The US should immediately correct its wrongdoings and stop the unreasonable suppression of Chinese companies,” He said. “China will take all necessary actions to defend the lawful rights and interests of Chinese companies.”

In a seemingly tit-for-tat move, China sanctioned two US companies on Thursday, announcing that all the assets of the defence contractors in China would be frozen and their executives denied visas. That marked the latest in a series of largely symbolic sanctions against American companies involved in sales of weapons to Taiwan, with such measures to have little effect as the firms likely have no assets in China.

Once added to the US list, entities are rarely removed, although in an unusual concession, the Biden administration withdrew a Chinese government laboratory as part of a deal to combat the fentanyl crisis, around the time of last November’s summit between Biden and Xi.

Four of the firms added to the entity list this week were included for buying US-origin goods to support China’s military modernisation efforts, the Department of Commerce said in statement. Another was targeted for supporting Russian military procurement, while the sixth firm had tried to help Iran buy components for unmanned aerial vehicles, according to the statement.

There is a “presumption of denial” for applications to export to the four companies, according to the statement, meaning they will likely be unable to purchase US-origin items in the future. The companies are involved in providing AI chips to the Chinese military, according to a Reuters report of comments from Kevin Kurland, an export enforcement official.

“The US will do whatever is necessary to maintain its technological competitive advantage, especially on technologies that are considered dual use,” said Montufar-Helu, expressing scepticism over the “small yard, high fence” description officials have used to defend that policy.

“Over the past months, it seems that the yard has expanded a little bit,” he said.

  - Bloomberg