State Department Driving To Force U.S.-China ‘Decoupling,’ Slaps Restrictions on Major Firms

Aug. 26, 2020 (EIRNS)—Under the name of Mike Pompeo, the State Department announced today that the Commerce Department has placed 24 People’s Republic of China state companies, including some of its most important construction and engineering companies, on its “Entity List,” in coordination with the State Department denying U.S. visas to the executives of those companies and specific government officials, and their relatives.

The pretext is to punish the Chinese government and companies charged with “malign activities” in the South China Sea (“the large-scale reclamation, construction, or militarization of disputed outposts in the South China Sea” or “use of coercion against Southeast Asian claimants to inhibit their access to offshore resources”). The intent, however, is clear from the pattern of economic warfare, military provocations, and wild insults being thrown against China by this out-of-control Anglophile network infiltrated into the Trump Administration: to force China into a fight with the United States which it does not wish to have, to justify a full decoupling.

Pompeo and the unnamed “senior State Department official” who gave a background briefing on this action later in the day, singled out China Communications Construction Company (CCCC) for attack. Technically, only four CCCC subsidiaries are on the list, but the attack is on the CCCC as a whole, and explicitly because this company, one of China’s biggest engineering companies active in rail, port, and other major construction projects around the world, is “one of the leading contractors used by Beijing in its global ‘One Belt One Road’ strategy,” and China “must not be allowed to use CCCC and other state-owned enterprises as weapons to impose an expansionist agenda.”

The unnamed “Senior Commerce Department official” joining State in the background briefing today explicitly stated that the intent of placing the 24 companies on the “Entity List” is to force all foreign companies, not just U.S. companies, to cut off all business with CCCC and the others designated. “The consequences of parties being added to our entity list is that any item subject to our regulations, which essentially means anything leaving the United States as well as certain items that are made abroad, when they are to be exported, re-exported, or even transferred in-country to a party on the entity list, is [sic] a specific license is required,” he explained, and “any transfer of such items to these parties undergoes U.S. government review and, as a practical matter, the licensing policy is presumption of denial for any such proposed exports, re-exports, or in-country transfers.”

“We also know from experience,” the official continued, that “typically many companies tend to stay away from doing business with parties on the entity list, either just for reputational purposes or to further ensure that they don’t run afoul of the Export Administration Regulations.”

Note that according to the Commerce Department’s Bureau of Industry and Security site, this sanctions-like “Entity List” scheme first went into operation in February 1997, with the initial pretext of restricting transactions which could be diverted into weapons of mass destruction (WMD) programs, but it was subsequently expanded “to activities sanctioned by the State Department and activities contrary to U.S. national security and/or foreign policy interests.”