US expands crackdown on China with export ban on Inspur, BGI units

BLOOMBERG

The Biden administration announced export restrictions for dozens of Chinese entities, including server maker Inspur Group Co and units of genetics firm BGI, citing activities contrary to US national security and foreign policy interest.
The Commerce Department added a number of companies to the so-called Entity List for acquiring or attempting to acquire US-origin items in support of China’s military modernisation efforts.
Among the notable China additions are Inspur Group, the state-affiliated maker of computer servers that’s benefited from datacenter construction nationwide, and Beijing-based CPU maker Loongson. Both are regarded as integral to the government’s effort to replace foreign-made technology and propel domestic innovation.
Loongson is considered a potential alternative in the future for Intel Corp chips, while Inspur competes directly with servers made by the likes of HP Inc. and Dell Technologies Inc.
Another company cited is 4Paradigm Technology, an up-and-coming AI unicorn backed by some of the world’s biggest investors including Sequoia Capital, Goldman Sachs Group Inc. The US added Chinese agencies such as the National Research Center for Parallel Computer Engineering and Technology and the Wuxi Institute of Advanced Technology.
Inspur Electronic Information Industry Co fell its daily limit of 10%, on top of losses of between 4% and 17% among other group affiliates listed in Hong Kong and mainland China. Loongson Technology Corp slid in Shanghai.
“There are so many different topics here,” said Cordell Hull, who led Commerce’s Bureau of Industry and Security during the Trump administration and is now a principal at national security advisory firm WestExec. “It’s a broad collection of Chinese entities spread across various topics and demonstrates the wide-ranging concern the US government has about the PRC’s activities around the world, and attempting to ensure that US technology isn’t furthering that malfeasance.”
US companies are banned from exporting to the listed entities without prior government approval. The US government cited specific concerns for groups of companies, including “support of China’s military modernisation” and “contributions to ballistic missile programs.”
“When we identify entities that pose a national security or foreign policy concern for the United States, we add them to the Entity List to ensure we can scrutinise their transactions,” Assistant Secretary for Export Administration Thea Kendler said.