Chinese government and biometrics suppliers respond to U.S. Entity List expansion

State publication China Daily reports expert opinion that the addition of 33 new companies, including five biometrics providers, to the U.S. government’s restricted Entity List will hurt suppliers in America and damage international cooperation on technology, and the Chinese government has demanded the restrictions be withdrawn, according to The Associated Press.

China’s Foreign Ministry accused the U.S. of interfering in its affairs with the addition of a new round of companies, including CloudWalk, NetPosa, SenseNets, Intellifusion, and IS’Vision, to its export restrictions based on alleged involvement in rights abuses in Xinjiang. Ministry spokesperson Zhao Lijian said the U.S.’ move not only harms China’s interests, but also “violated basic norms of international relations.”

Huawei, while not included on the Entity List due to the Xinjiang allegations, or to another round of allegations related to procuring technology for China’s military, was recently hit with increased U.S. sanctions on the company’s chip supply, after which Huawei’s main semiconductor supplier Taiwan Semiconductor Manufacturing Co. (TSMC) stopped taking its orders.

One of the firms affected, Qihoo 360, said in a statement the while being added to the Entity List will cause it some problems, daily operations will not be significantly affected.

Raymond Wang, a partner at Germany-based consultancy Roland Berger, says that the Entity List expansion represents a wider attack on Chinese companies and institutions, and could result in technology “decoupling” between the two countries.

“On one hand, China is the biggest market for US technology providers; on the other hand, China also has leading technologies that the US needs. So decoupling does no good to the two countries, as well as the rest of the world, especially against the backdrop of the battle against the COVID-19 outbreak and economic recovery,” Wang said, according to China Daily.

“We formulate and implement strict ethical standards for the use of AI technologies and provide services to customers based on our self-developed technology and products with independent intellectual property rights to propel the healthy development of AI,” CloudWalk said in a statement, emphasizing its compliance with the laws and regulations of the countries it operates in.

Telecom industry group Information Consumption Alliance Director General Xiang Ligang said that U.S. semiconductor companies will be hardest hit by the new Entity List additions.

The new addition come on top a first round of companies, including many of the country’s top facial recognition and biometrics providers, restricted from dealings with U.S. companies through placement on the Entity List last year.