China announced new sanctions targeting American entities and tighter drone export controls affecting shipments to the U.S. on Wednesday, adding to tensions weeks before Chinese leader Xi Jinping is expected to visit the U.S.
The measures target seven American entities and mean more scrutiny of drone-related shipments to the U.S. Beijing described the actions as retaliation for recent American restrictions on Chinese companies and technology imports.
The latest exchange comes as Washington and Beijing try to maintain stability in their relationship amid a growing fight over technology and supply chains.
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What China announced
China’s Commerce Ministry added seven U.S. entities to its list of countermeasures, preventing Chinese people and organizations from working with them.
Six were targeted after Washington barred imports from 43 Chinese companies over alleged forced labor involving Uyghurs and other minority groups in Xinjiang. Beijing has repeatedly denied allegations of forced labor.
China separately sanctioned Compliance Testing LLC, accusing the company of helping the Federal Communications Commission introduce measures that threatened China’s sovereignty, security and development interests.
The ministry said exports of drones, key components and related technology to the U.S. would also see more scrutiny.
Why drones matter
Drones have become another point of friction in the U.S.-China technology dispute.
Chinese companies lead the global drone industry and dominate much of its supply chain. In December, the FCC banned the import and sale of new foreign-made drone models and related components, citing national security concerns.
China has tightened export controls on drones in recent years. Wednesday’s measures expand that approach to shipments bound for the U.S.
Alicia García-Herrero, chief economist for Asia-Pacific and the Middle East at Natixis, told the South China Morning Post that Beijing is extending its rare-earths strategy up the value chain, from raw materials to finished-goods components in sectors it dominates.
A wider tech fight
The drone restrictions are part of a broader clash over trade and technology measures.
Recent U.S. actions have included restrictions on imports of some foreign-made robots and power converters, sanctions against Chinese shipping operators accused of handling Iranian fuel and the addition of Chinese institutions, including two civilian universities, to a Pentagon blacklist.
Washington also barred imports from dozens of Chinese companies over alleged forced labor and has threatened sanctions against Chinese artificial intelligence firms.
Beijing’s response extended beyond sanctions and drones. China opened a national security investigation involving foreign software used in imported printing and copying equipment and suspended some factory-tracking inspection cooperation with the U.S.
The summit backdrop
The measures come ahead of an expected meeting between Xi and President Donald Trump in the U.S. next month.
Top American and Chinese economic officials held talks by video last week. A Chinese vice foreign minister also visited the U.S. in July in what was widely viewed as preparation for Xi’s trip.
China’s Commerce Ministry characterized its response as restrained and called on Washington to withdraw its recent measures.
The ministry also warned that China could impose further countermeasures if the U.S. introduced additional restrictions.
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