Chinese companies hit with US trade restrictions over ‘spy balloon’ incident

The Biden administration added 37 Chinese entities to a trade restriction list on Thursday, including some for allegedly supporting the “spy balloon” that flew over the United States last year, heightening tensions between Beijing and Washington.

The US Commerce Department also said it was adding some units of China Electronics Technology Group to the list for allegedly trying to obtain American technology to support China’s quantum technology capabilities, “which has serious ramifications for US national security” due to their military applications.

Media have said state-owned China Electronics Technology Group is a top military equipment supplier.

China Electronics Technology Group could not immediately be reached for comment. The Chinese embassy in Washington did not immediately respond to a request for comment.

The moves announced on Thursday show the Biden administration is continuing to punish Beijing over the balloon, which drifted over the United States in February 2023, fueling political outrage in Washington and prompting State Department Secretary Antony Blinken to cancel a trip to China.

That month, the US Commerce Department added five companies and one research institute to the entity list for supporting “China’s military modernisation efforts, specifically the People’s Liberation Army’s (PLA) aerospace programmes including airships and balloons”.

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

The trade restriction list, known as the entity list, has been used aggressively by the United States to stem the flow of technology to China amid concerns Beijing could use it to bolster its military capabilities.

Being added to the list makes it harder for US suppliers to ship to the targeted entities.

The Biden administration on Thursday also added a handful of Chinese entities to the list for trying to obtain American items for making drones to be used by the Chinese military and others for shipping controlled items to Russia.