WASHINGTON – The United States said on Monday that it would block a Chinese state-owned technology company from buying US components because it was a national security threat, the latest volley in an escalating dispute between the world’s two largest economies.  The company, Fujian Jinhua Integrated Circuit, a semiconductor manufacturer, “poses a significant risk” to be involved in activities that might be contrary to national security, said the Ministry of Commerce.
Moved may weaken Jinhua, relying on US components for its semiconductor, and followed similar actions taken by the trade department this year to block sales of components to ZTE, a Chinese telecom company. The ZTE ban was suspended after President Trump ̵
1; responding to a request from President Xi Jinping in China in May – asked the department to ease the sentence. ZTE agreed to pay a large fine, redistribute its leadership, and undergo compliance monitoring from the United States.
But relations between the United States and China have weakened since then, and the Trump administration is taking increasingly tough lines on transactions involving Chinese entities. It is important to prevent China’s ascension as an economic and technical power plant and has begun to aggressively review foreign agreements to prevent Beijing from gaining access to valuable US intellectual property.
This month, the government department described how it would use new powers that allow the United States to review a broader range of foreign transactions, including those in sensitive industries such as technology and telecommunications.
“When a foreign company is conducting activities that violate our national security interests, we will take strong measures to protect our national security,” said Wilbur Ross, Commercial Secretary. “Placement of Jinhua on the company list will limit its ability to threaten the supply chain for essential parts of our military systems.”
Jinhua has been on the trumpet administration radar for several months. Micron Technology, a computer company in Idaho, accused Jinhua last year of stealing intangible property. In July, Micron stopped selling some of its products in China after Jinhua and its Taiwanese partner, United Microelectronics, accused Micron of breaking their patents.
Jinhua opens $ 5.7 billion factory in China’s Fujian province and has become increasingly ambitious in its desire to become a global player in the memory circuit industry.
The United States and China have been involved in a trade war with Mr Trump charging $ 250 billion of Chinese goods and threatening to collect all imports from China with charges. China has responded with its own tariffs and the two countries have exchanged increasingly heated words in recent weeks.
The United States wants China to open its market for American companies and end its long-standing practice of pushing US companies to hand over valuable technology as a prerequisite for doing business there. Mr Trump and Mr Xi are expected to meet in Argentina next month in the 20’s group, where they plan to discuss trade, North Korea and other issues.
While Mr Trump’s charges have proved to be unpopular with both Republican and Democratic legislators, his efforts to stop the theft of intellectual property have been praised even by their skeptics of trade.
“China’s state-owned and regulated companies lie, cheat and steal at government’s request.” Senator Marco Rubio, a republican from Florida, said on Twitter on Monday. “Fujian Jinhua must be held responsible for being part of this illegality. This was the right flight today to protect our technical knowledge.”