The United States adds Chinese companies to the black list, citing the repression of Muslim minorities

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WASHINGTON – The United States added 28 Chinese entities to an export blacklist on Monday, citing their role in Beijing's repression of Muslim minorities in northwest China, just days before high-level trade negotiations resumed in Washington.

The action, which according to the United States was not related to trade talks, was however likely to disturb Chinese officials already censored about what Beijing sees as US support for an increasingly disruptive democratic movement in Hong Kong.

"I think the Chinese will probably see a connection, even if the administration says it is not a", he said

Matthew Goodman,

senior consultant for the Asian economy at the Center for Strategic and International Studies, a Washington think tank. "This week will complicate the discussions … the times will be embarrassing for the Chinese."

The objectives of the action include the giants of video surveillance and facial recognition Hangzhou Hikvision Digital Technology, Megvii Technology Inc. and SenseTime Group Ltd. The Department of Commerce's decision to add companies to its "entity list" alongside the giant telecommunications company Huawei Technologies Co. — Which was added in May – means that suppliers will be prohibited from providing technology that originates in the United States to Chinese companies without a license.

Recently identified entities "have been implicated in human rights violations and abuses in the implementation of the Chinese campaign of repression, arbitrary mass detention and high-tech surveillance against Uighurs, Kazakhs and other members of Muslim minority groups" in the region of Xinjiang, northwest China, said the trade department.

A spokesman said the move is not related to trade negotiations.

Western scholars estimate that more than one million Turkish Uighurs and other Muslim minorities have been arbitrarily detained in China's Xinjiang region in recent years.

The United States will also add the Xinjiang Public Security Bureau and 19 entities subordinate to the list of entities, along with the Chinese companies Dahua Technology Co., IFLYTEK,

About Xiamen Meiya Pico Co.

, Yitu Technologies and Yixin Science & Technology Co., says the Department of Commerce document. The new policy will take effect at the end of this week.

A Hikvision spokesman said the company "firmly opposes today's US government decision" and that the company "respects human rights and takes our responsibility seriously to protect people in the United States and around the world ".

The other companies could not be contacted immediately for comment.

Responding to the possibility of such a blacklist in May, a spokesman for the Chinese Foreign Ministry accused the United States of "using national powers to smear and oppress some Chinese companies. We are firmly against this and our position is consistent and clear ".

Although highly symbolic, the Department of Commerce's action is unlikely to have a great practical impact on Chinese companies, which rely on numerous non-US suppliers and have had months of notice to diversify their supply chains from US companies. Export controls will also not prevent US companies from selling certain products manufactured outside the United States to these companies, as they did with Huawei.

Even before the developments on Monday, the people who followed the US-China trade negotiations stated that it is unlikely that China will offer deep concessions on subsidies, state-owned enterprises, forced technology transfer or the delicate issues of digital commerce that were on the table of bargaining in the spring – all thorny problems that have been bogged down for months.

It is more likely that the discussions will focus on a more limited set of issues, said one of the people, such as agricultural purchases, intellectual property protections, the modest relief of Chinese tariffs on US exports and greater market access for financing or other foreign companies.

Talks between the two countries for an overwhelming trade agreement hit a dead end early May; While the talks continued, little progress was made towards an agreement and most observers narrowed their expectations on what the negotiators might be able to achieve.

President Trump, speaking Monday at the White House during a signing ceremony for a trade agreement with Japan, said that there is "certainly a good chance" for a major trade agreement with China, adding that a partial agreement is "unlikely" .

But the hopes of a broad agreement were complicated by a series of problems between the United States and China that highlighted the underlying tensions, including an aftermath that followed after the Houston Rockets' general manager of the NBA tweeted support for the protests in Hong Kong. Last week, Trump publicly invited China to launch an investigation into a political rival

Joe Biden,

after such a request from Ukraine pushed the Democrats to initiate an impeachment investigation.

The best economic consultant of the White House,

Larry Kudlow,

told reporters Monday that the president was not suggesting that a Mr. Biden investigation could be a factor in the trade talks.

Beijing claims that the United States is trying to halt their progress on the global scene and has responded to US tariffs in the last year with their own rates on American agriculture and a sharp reduction in purchases of farms.

The only positive point recently was the Chinese agricultural purchases. Chinese buyers have bought over 1.5 million tons of American soybeans only in the last week of September, according to US data, some of the largest purchases in more than a year.

In August, according to a report by the Commerce Department, the best month since January 2018, China has purchased nearly $ 1.5 billion of total agricultural exports, including $ 945 million of soy.

The figures are among the most encouraging since the US-China trade war began.

"Soybeans are a barometer of how everything is going," said Jim Sutter, CEO of the US Soybean Export Council. "I think we're just recovering momentum."

Even so, these purchases will have to be well supported after this week's talks to bring about a sustained recovery for US farmers, a key constituency for Mr. Trump who has been severely hit by the trade war.

US negotiators may have to give ground to keep purchases coming, including easing some restrictions on Huawei, the Chinese telecommunications giant that the United States has identified as a national security risk, he said

Michael Hirson,

the practice is directed towards China at the Eurasia Group political risk consultancy company.

"I think I keep buying from AG, the probable concession from the United States is postponing these upcoming rate increases and a kind of modest gesture on Huawei," Hirson said.

On October 15, the United States will increase tariffs to 30% – from 25% now – with a value of almost $ 250 billion of goods. More tariffs will increase on December 15, with withdrawals of 15% on $ 156 billion of Chinese imports, including smartphones and other consumer goods.

Additional level American and Chinese officials started in Washington on Monday, followed by talks between Mr. Trump, US sales representative

Robert Lighthizer

and treasury secretary

Steven Mnuchin,

and China's main commercial envoy, Liu He, starting Thursday.

Write to Josh Zumbrun at Josh.Zumbrun@wsj.com, Kate O’Keeffe at kathryn.okeeffe@wsj.com and William Mauldin at william.mauldin@wsj.com

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