(Bloomberg) — The Biden administration ratcheted up pressure on Beijing over its treatment of ethnic and religious minorities, as U.S. lawmakers passed a bill targeting companies that rely on forced labor from the Xinjiang region of China.
The administration on Thursday added 34 entities in China, including 11 research institutes within the Academy of Military Medical Sciences, to its banned entity list, saying they are part of a network that misuses biometric surveillance technology to track and repress ethnic and religious minorities. American companies need a license to do business with those on the Commerce Department’s entity list.
Later in the day, the Treasury Department announced that U.S. investors would be prohibited from investing in eight Chinese technology companies, including DJI Technology Co. Ltd., Cloudwalk Technology Co. LT-A and Yitu Limited.
“Today’s action highlights how private firms in China’s defense and surveillance technology sectors are actively cooperating with the government’s efforts to repress members of ethnic and religious minority groups,” Brian Nelson, an undersecretary for Terrorism and Financial Intelligence, said in a statement accompanying the Treasury list.
To see a full list of the entities impacted by the U.S. click here
A U.S. official said China had a documented history of exploiting DNA collection and biometric facial recognition for mass surveillance of all residents ages 12 to 65 of Xinjiang, a predominantly Muslim region, enabling mass detention and unlawful persecution.
The wave of penalties arrived before Senate approval on Thursday of legislation that would ban goods made in Xinjiang from being shipped to the U.S. unless companies can prove that they’ve not been made with forced labor. The bill, which now goes to President Joe Biden for his signature, had broad bipartisan support in the normally polarized Congress.
Human rights has emerged as a key irritant in already tense U.S.-China relations alongside Beijing’s tightening control over Hong Kong, incursions into Taiwan’s air defense identification zone and more aggressive posture in the South China Sea. The U.S. has sought to build up its alliances in the Indo-Pacific region as a bulwark to China and recently announced a “diplomatic boycott” of the 2022 Winter Olympics in Beijing.
About 1.5 million Turkic Muslims, primarily ethnic Uyghurs and Kazakhs, have been detained in “re-education camps” in Xinjiang since 2017. Chinese officials have described the camps as “vocational educational institutions” that provide “de-extremization” programming.
Chinese officials repeatedly reject charges that forced labor is used in Xinjiang and call the U.S. legislation interference in the nation’s domestic affairs. On Friday, Chinese Foreign Ministry spokesman Wang Wenbin accused the U.S. at a regular news briefing in Beijing of “over stretching the concept of national security” to abuse its export control measures.
“We urge the U.S. to correct its wrongdoing,” he said. “And we will take all necessary measures to uphold the legitimate rights and interests of Chinese institutions and companies.”
Thursday’s actions follow the U.S. government’s action on Dec. 10 placing investment restrictions on SenseTime Group Inc., China’s largest artificial intelligence firm. SenseTime then withdrew its planned initial public offering in Hong Kong.
SenseTime is considering reopening orders for its IPO as soon as Monday, according to people familiar with the matter.
The Commerce list didn’t include any major biotech names. Shares in some of China’s biggest health care firms, including Wuxi Biologics, rebounded in Hong Kong on Friday, recovering losses after the Financial Times reported the U.S. might sanction unidentified biotech companies.
(Updates with market rebound and Chinese Foreign Ministry comment.)
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