U.S. blacklists seven Chinese supercomputing entities citing national security concerns

KEY POINTS

• The Commerce Department added seven Chinese supercomputing entities to a U.S. economic blacklist citing national security concerns.
• The seven entities were blacklisted for "building supercomputers used by China's military actors, its destabilizing military modernization efforts, and/or weapons of mass destruction programs."
• U.S. officials have long complained that Chinese companies are beholden to the People's Republic of China and collect sensitive information on behalf of the People's Liberation Army.

Chinese and U.S. flags flutter outside the building of an American company in Beijing, China January 21, 2021.

Tingshue Wang | Reuters

WASHINGTON – The Commerce Department on Thursday added seven Chinese supercomputing entities to a U.S. economic blacklist citing national security concerns.

The department added Tianjin Phytium Information Technology, Shanghai High-Performance Integrated Circuit Design Center, Sunway Microelectronics, the National Supercomputing Center Jinan, the National Supercomputing Center Shenzhen, the National Supercomputing Center Wuxi and the National Supercomputing Center Zhengzhou to its blacklist.

The seven entities were blacklisted for "building supercomputers used by China's military actors, its destabilizing military modernization efforts, and/or weapons of mass destruction programs."

U.S. officials have long complained that Chinese companies are beholden to the People's Republic of China and collect sensitive information on behalf of the People's Liberation Army. The Chinese Communist Party has previously said that it does not engage in industrial espionage. 

"Supercomputing capabilities are vital for the development of many – perhaps almost all – modern weapons and national security systems, such as nuclear weapons and hypersonic weapons," U.S. Secretary of Commerce Gina Raimondo wrote in a statement.

"The Department of Commerce will use the full extent of its authorities to prevent China from leveraging U.S. technologies to support these destabilizing military modernization efforts," she added.

The new rules, which restrict U.S. exports to the entities in question, take effect immediately. However, they do not apply to goods from U.S. suppliers that are already en route.

The Chinese Embassy in Washington did not immediately respond to CNBC's request for comment.

Under former President Donald Trump, the U.S. added a slew of Chinese companies to its economic blacklist, including the country's top smartphone maker, Huawei, top chipmaker SMIC and the largest drone manufacturer, SZ DJI Technology.