Why China threatens Cisco, Dell, HP and Lockheed Martin
All countermeasures in the pipeline in China to respond to the US trade offensive. Here are the American groups that risk the most and the least
Beijing has decided not to witness the US trade offensive inert against her, taking decisive countermeasures that appear to be completely mirroring those taken by the rival.
As CNBC tells us, the protagonist of the Chinese revenge is in this case the Chinese Ministry of Commerce, which over the weekend released the rules on the basis of which the so-called "list of unreliable entities" will work. The language is deliberately vague to reflect the similar measure taken last year by colleagues in US Commerce, and the goal is more or less the same: to cut the umbilical cord between Chinese and US companies.
WHAT CHINA HAS DECIDED
The rules released yesterday, but which date back to May 2019, establish – as stated on the website of the Ministry of Commerce – the consequences that foreign entities (individuals, companies, organizations) will face that are considered a danger to "national security. or China's development interests ”.
THE RULES
The authorities, the regulation continues, can also add a name to the list if that entity suspends "normal transactions", takes "discriminatory measures" against Chinese entities, "(in violation of) normal principles of market transactions", or "causes serious damage to the legitimate rights and interests of the (Chinese) enterprise.
THE EFFECTS
The consequences for a person on the list can range from restrictions or prohibitions on the purchase of Chinese goods to restrictions on investments and on work or travel permits.
THE LIST OF PRODUCTS
According to Michael Hirson, head of the Asia and Southeast China division of the Eurasia group, the Chinese will focus, at least initially, on listing products that are in competition with a domestic manufacturer, while avoiding those companies that produce goods that they are necessary for the Beijing economy. According to Hirson, the first candidates to enter the list of the ministry of commerce are giants such as Cisco, Dell / EMC, HP, Lockheed Martin and Rockwell Collins.
THE EURASIA REPORT
Also according to the Eurasia analyst, the less risks are run by companies like Apple or Microsoft (to have, writes Hirson, "high global visibility and be good" corporate citizens "within China), chip makers Qualcomm and Intel / AMD (which are "major suppliers and have made great efforts to establish positive relations with the country) and finally Boeing (which despite selling helicopters to Taiwan, plays a critical role in the Chinese airline industry).
LESS RISKS ARE APPLE, MICROSOFT, QUALCOMM, INTEL / AMD AND BOEING
According to Hirson, Beijing will begin to act by inserting a first American name on the list, and then continuing in fits and starts – perhaps within a few days – as a strategy to show how this tool is flexible and can be used in a targeted way.
There is great concern in the home of the US Business Council, worried about the "high level of discretion" with which an American company could end up in the crosshairs of the Chinese Commerce Department. But the most worrying thing, according to the US Business Council, is that US companies will no longer know what to do with because they will be squeezed between two very different regulations, the Chinese one and that of their own home.
In short, the trade war between the US and China always continues with new moves and twists that we do not know how long they will continue.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/mondo/perche-la-cina-minaccia-cisco-dell-hp-e-lockheed-martin/ on Tue, 22 Sep 2020 12:50:38 +0000.