The United States government has a blacklist of companies that can not purchase American goods without special licenses. This blacklist has a lot of Chinese companies notable Chinese manufacturing giant, Huawei. According to a recent report, suppliers of Huawei and SMIC now have special licenses to purchase American goods worth billions of dollars. The licenses for these companies to purchase American goods and technology will be active between November and April next year.
Earlier this week, the U.S. Congress released some documents which reveal the details of the licenses that these companies got. Here is a summary of the approval;
- Huawei: Suppliers got 113 export licenses worth $61 billion. These goods or technology can be shipped to the Chinese manufacturing giant.
- SMIC: Suppliers got 188 licenses worth nearly $42 billion. These goods and technology can ship to SMIC (Semiconductor Manufacturing International Corp).
It is important to note that SMIC (Semiconductor Manufacturing International Corp) is the largest chipmaker in China. This company is also on the U.S. blacklist just like Huawei. The U.S. congress document also shows that SMIC suppliers got licenses for over 90% of their applications. As for Huawei suppliers, they got about 69% of their total license applications.
The U.S will not sell advanced technology to many Chinese companies
The U.S. is technically against selling top technologies (especially 5G related) to China. There has been an outcry in the U.S. considering the number of approvals. The is because the U.S. House of Representatives Foreign Affairs committee grants the huge licensing request from the Commerce Department. The outcry is that these Chinese companies are getting “too much” of American technology.
According to Republican Senator Marco Rubio, President Joe Biden needs to explain the reason behind these companies continuing to receive “waivers”. Rubio added, “It is just another example of President Biden not taking the economic and security threat posed by the Chinese Communist Party seriously”. Similarly, a top Republican member, Michael McCaul has this to say “It’s clearly in our national interest to increase transparency and public scrutiny on how our nation transfers its technology to an adversary”.
As of now, SMIC did not respond to requests for comments while Huawei outrightly declined to comment. However, a senior member of the Commerce Department in the Trump administration who pleads anonymity claims that the U.S. has successfully prevented the export of leading-edge technology to these companies without unnecessarily harming U.S. exports. He added “This very small period of license activity is not an accurate window into the Huawei and SMIC license process…This [document release] seems designed to mislead people and generate headlines”