On a day when markets were already waylaid by Donald Trump’s decision to stir the pot with aggressive tariff banter aimed at Brazil and Argentina, risk assets were dealt another small blow when the Global Times suggested Beijing may soon release its long-rumored “unreliable entity list”.
Over the summer, after the Trump administration blackballed Huawei, China started work on a list of what the Commerce ministry described as “foreign business organizations or individuals that do not abide by market rules, deviate from the spirit of the contract and/or impose non-commercial blockades on Chinese enterprises, which seriously damage [their] legitimate rights and interests”.
As we dryly noted at the time, it’s appropriate that the latest escalation in the spiraling dispute between Trump and China is something called an “unreliable entities list”. After all, Trump is, himself, the quintessential example of an “unreliable entity”. If there were a dictionary entry for “unreliable entity”, Trump’s picture would be beside it.
“China will release an ‘unreliable entity list’ soon”, the Global Times reported, in a tweet, citing unnamed sources. It will include “relevant US entities”, the Party mouthpiece went on to say, without specifying what would make an “entity” “relevant”.
The paper elaborated a bit, noting that the “US House is expected to pass a Xinjiang-related bill that will harm Chinese firms’ interests, prompting China to speed up the move”.
Last month, the US gave Hikvision the Huawei treatment, blacklisting the Chinese surveillance giant along with 28 public security bureaus and companies. The move was a rebuke of China’s human rights record and specifically, Beijing’s treatment of the Uighurs.
That decision was months in the making. Just a week after Trump blackballed Huawei in May, reports indicated Hikvision and other surveillance companies could be next. Just as the US rolled out the “national security” excuse to justify the Huawei move, the ban on Hikvision came pre-packaged with a lot of high-minded rhetoric about Beijing’s systematic disregard for human rights and China’s repressive tactics in Xinjiang.
The crackdown (as well as the scrutiny of Huawei) has bipartisan support on Capitol Hill. If anything, lawmakers are worried Trump will be too lenient on the companies.
Earlier Monday, China announced sanctions against US NGOs in retaliation for the Hong Kong bill.
Over the summer, market participants speculated about which US companies might land in Beijing’s crosshairs. FedEx, for example, found itself ensnared in an absurd dispute over rerouted packages.