Removal from US blacklist shows that suppression moves lack legitimacy

Two more Chinese companies have successfully challenged US authorities' controversial moves to blacklist them, highlighting Washington's growing lack of legitimacy as it seeks to suppress global competitors through unilateral political means, company executives and industry experts said on Thursday.

Their comments came as the United States Department of Defense removed Advanced Micro-Fabrication Equipment Inc China, a leading Chinese chip equipment manufacturer, and IDG Capital, a major investment firm that has businesses in both China and the US, from a blacklist on Wednesday.

In February, the two companies were added to Washington's list of "Entities Identified as Chinese Military Companies Operating in the US", due to the so-called "threat to US national security". AMEC, which said it has never been involved in military activities, filed a federal lawsuit against the decision in August.

Zhou Mi, a researcher at the Chinese Academy of International Trade and Economic Cooperation, said: "The success proved that it would be increasingly difficult for the US to leverage political means to restrict the development of Chinese industries. Such retrogressive measures are bound to face opposition from both the US and global industrial community."

He added that US moves "to suppress China's chip and other high-tech industries have violated WTO rules, disrupted the global industrial order, and fragmented supply chains, which all led to increased costs and decreased efficiency".

This will only harm global businesses, including those in the US, and consumers across the world, Zhou said.

In fact, this is not the first time Chinese companies have pushed back successfully through legal means.

In 2021, Chinese smartphone maker Xiaomi filed a lawsuit against the US Department of Defense over the same blacklist. Four months later, the Chinese tech company was removed from the list as the court ruled there was insufficient evidence to justify the decision.

Chinese leading drone manufacturer DJI, and Hesai Technology, a Chinese maker of remote sensors used in smart cars, also filed lawsuits for the same reason this year.

Liu Ying, a senior researcher at the Chongyang Institute for Financial Studies at Renmin University of China, said, "US suppression of China will inevitably trigger comprehensive countermeasures from Chinese companies and industries, ranging from legal to trade rule-based responses."

According to Liu, the WTO's website showed that the number of cases where the US has been the defendant far exceeded that of nearly all European Union economies so far, and the US has lost in most of them.

"Suppressing others cannot lead to its own success," Liu added. "The US' attempts at decoupling, breaking supply chains, or 'de-risking' from other countries will ultimately backfire, leaving the US marginalized."

Following AMEC's removal from the blacklist, Yin Zhiyao, chairman of the company, said: "Successfully being removed from the list fully reflected our determination and ability to safeguard legitimate rights and interests. The company will continue to operate in full compliance with the law, uphold technological innovation, pursue product differentiation and protect intellectual property."

The Shanghai-based company said in a statement that it won four of the five legal disputes with US equipment companies and the US government over the past 17 years. "This demonstrates that as long as we abide by laws, present facts, reason logically and persevere with intelligence and determination, we can secure an invincible position in the realm of business and government relations," AMEC said.

In a separate statement, IDG Capital welcomed this "important correction and clarification", saying it will continue to focus on its mission of generating exceptional returns for its investors.