US blacklists Chinese companies over suspected surveillance balloon

The United States has added six Chinese entities to an export blacklist in connection with Beijing’s suspected surveillance balloon programme.

Announcing restrictions against five companies and one research institute on Friday, the US Bureau of Industry and Security said the entities were being targeted for “their support to China‘s military modernisation efforts, specifically the People’s Liberation Army’s (PLA) aerospace programmes including airships and balloons”.

“The PLA is utilizing High Altitude Balloons (HAB) for intelligence and reconnaissance activities,” it added.

The new restrictions follow the White House’s announcement that it would consider broader efforts to “expose and address” China’s larger surveillance activities that endanger US national security and allies.

The spectacle of the Chinese balloon drifting over the United States last week sparked political outrage in Washington and further strained relations between the two countries.

It also prompted secretary of state Antony Blinken to cancel a trip to Beijing that both countries had hoped would mend strained ties.

“Today’s action demonstrates our coordinated efforts to identify and disrupt the PRC’s use of surveillance balloons, which have violated the airspace of the United States and more than forty countries,” said Matthew Axelrod, assistant secretary of commerce for export enforcement.

“The PLA is using High Altitude Balloons for intelligence and reconnaissance activities,” according to the listing in the Federal Register, the official daily journal of the United States.

The list is used to punish Chinese companies viewed as a threat to national security and keep Beijing from advancing militarily.

These companies have worked with Chinese government in different capacities. One of the listed companies, Beijing Nanjiang, is a unit of Shanghai-listed developer Deluxe Family and partnered with Beihang University in developing China’s first military-civilian near-space airship.

Other firms, such as Dongguan Lingkong Remote Sensing Technology, Guangzhou Tian-Hai-Xiang Aviation Technology and Shanxi Eagles Men Aviation Science and Technology Group have close ties with the Chinese military, and makes aviation products for civilian and military use.

Another company, Eagles Men Aviation, was invested in by a private equity fund promoting military-civil integration.

China’s foreign ministry has said it was a weather balloon that had blown off course and accused the United States of overreacting.

The Biden administration’s move makes it challenging for targeted firms to obtain US tech exports.

Washington has accused the manufacturer of the Chinese balloon of having a “direct relationship” with the PLA, which China has denied. Earlier, China’s largest balloon manufacturer, Zhuzhou Rubber Research & Design Institute, denied any ties with the balloon.

“It is an unmanned airship that is reported, which is not related to our company,” a spokesperson said on Wednesday.

China has admitted to owning the balloon but said it was intended for civilian purposes and had entered US airspace by accident.