Potential Implications for Chinese Military Firms Beyond Investment Restrictions
The new U.S. executive order restricting investments in certain Chinese military-industrial firms may provide a window into companies separately subject to export restrictions related to military end use.
U.S. regulations require exporters to obtain a license before selling certain technologies to Chinese entities that deal with military items. The U.S. regulations do not exhaustively name every entity in China subject to the military-related export restrictions, rather requiring that exporters conduct due diligence to determine whether potential buyers are engaged in any such activity.
One of the entities listed under the new executive order, China Marine Information Electronics Co., Ltd., has subsidiaries that obtained production licenses from China’s military industry regulators to engage in defense-related production. These licenses authorize the companies to conduct research and development, and manufacture components for use in military items, as well as to engage in classified research.