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As China develops a plan to retaliate against UN sanctions on Chinese companies such as Huawei and TikTok, the Chinese authorities are reportedly mulling over which American companies to target. Amid speculation that major American IT firms such as Apple, Qualcomm, and Cisco could face retaliation, a new report says that telecommunications equipment firm Cisco appears to be included on China’s list. China is expected to release its blacklist of companies facing retaliation after the US presidential election on Nov. 3 in consideration of political repercussions.

In a Sept. 21 report, the Wall Street Journal quoted sources as saying that Cisco appears to be on an “unreliable entity” list that China’s Commerce Ministry is developing for use against the US. As evidence for the claim, the Wall Street Journal noted that Cisco has already lost long-term contracts with Chinese state-owned telecoms. American businesspeople were also quoted as saying that the Chinese government had recently instructed Chinese companies to end contracts with American companies, even if they incurred penalties doing so.

While the report doesn’t definitely confirm that Cisco is on the blacklist, it’s still significant as providing the first concrete, though circumstantial, evidence of an American company being on the blacklist. At one time, Cisco was the world’s largest telecommunications equipment firm; even today, it has a market capitalization of more than 190 trillion won (US$163.1 billion) and reportedly does considerable business in China.

Along with Cisco, other American companies that are thought to be potential targets of Chinese sanctions are Apple and Qualcomm. After China’s state-run Global Times reported back in May that companies such as Apple, Qualcomm, Boeing, and Cisco could be added to a blacklist in retaliation for American sanctions on Huawei, those companies have received steady industry attention. Apple and Qualcomm could be particularly vulnerable to any sanctions that end up being imposed because of their substantial operations in China.

But China isn’t likely to release its blacklist right away. While the Chinese government is speeding up efforts to finalize the list, it’s hesitated to release it, the Wall Street Journal reported. Chinese actions are apparently based on the principle of keeping pace with, but not outpacing, US pressure on Chinese companies, which began with sanctioning Huawei and continued with demanding the sale of TikTok. That has led to the prediction that the Chinese authorities won’t actually publish their blacklist until after the US presidential election this November.

The fact that the Chinese government is drawing up a blacklist was first made public in May of last year, in response to the US’ decision to tighten regulations on Huawei. Tensions between the two countries relaxed somewhat after they concluded their Phase 1 trade deal this past January. But after the Trump administration kept bludgeoning Chinese companies, the Chinese government escalated its countermeasures against the US by publishing rules about the blacklist on Sept. 19.

According to these rules, companies that halt normal business with Chinese companies in violation of market trading principles or that take discriminatory measures against Chinese companies would face restrictions or even an outright ban on investing in China or being involved in Chinese imports or exports. At the individual level, that could lead to an entry ban or the cancelation of a visa or residency status. The rules authorize the Chinese government to impose fines and take “other necessary measures.”

By Choi Hyun-june, staff reporter

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