China Accuses US of Using ‘National Security’ as Pretext to Suppress Chinese Firms
Beijing says Washington’s expanding “military companies” blacklist and tightened chip curbs target Chinese technology as a whole, warning of “resolute countermeasures” if suppression continues.
BEIJING — China has strongly condemned the United States for what it describes as the systematic abuse of “national security” to justify a widening campaign of economic coercion against Chinese technology firms, as Washington’s restrictions expand to cover everything from artificial intelligence chips to e-commerce platforms and electric vehicle manufacturers.
“The US side, in disregard of the overall interests of China-US economic and trade relations, has continuously overstretched the concept of national security and abused state power to suppress Chinese businesses without justification,” China’s Ministry of Commerce said in a statement on Saturday .
The rebuke came after the Pentagon updated its “list of Chinese military companies” this week, placing 188 Chinese entities on the roster. The list now spans artificial intelligence, e-commerce platforms, electric vehicles, batteries, semiconductors, robotics, and biopharmaceuticals . Chinese state media noted that the scope of the blacklist “keeps expanding” and has become increasingly absurd .
The ‘Military Companies’ Blacklist: From “Absurd Farce” to “Roll of Honor”
The Pentagon’s blacklist — formally known as the list of “Chinese military companies” operating in the United States — has drawn sharp criticism from Beijing. Chinese officials argue that the labeling is arbitrary and devoid of any credible evidence linking the targeted firms to the Chinese military.
An editorial published by the Global Times and carried by state-run People’s Daily described the blacklist as an “absurd farce” marked by “arbitrary criteria and flawed logic” . The editorial noted that companies ranging from e-commerce platforms to new energy vehicle manufacturers, none of which have any connection to the military, can be labeled as supporting China’s armed forces simply because they have made progress in fields such as AI, cloud computing, or battery technology.
“At its core, this represents a presumption of guilt stemming from the logic of ‘being targeted simply for possessing valuable assets,’” the editorial stated . It argued that any Chinese tech firm with global competitiveness is arbitrarily labeled as having “military links” — a standard that would, if applied consistently, render numerous American tech giants equally vulnerable to similar blacklists.
Notably, Chinese state media has reframed the expanding list as an inadvertent “roll of honor” for the country’s most innovative companies. “The ever-expanding scope and growing number of targeted companies reveal an uncomfortable reality: The US strategy of labeling and selectively targeting individual Chinese firms has failed,” the editorial argued .
AI Chip Curbs Target Overseas Subsidiaries
The Commerce Department’s Bureau of Industry and Security (BIS) has also escalated its technology restrictions. Earlier this month, Washington moved to close what it called a “loophole” that may have allowed Chinese companies’ overseas subsidiaries to access the world’s most advanced AI chips — including Nvidia’s sophisticated Blackwell processors — from locations such as Malaysia .
Chinese experts have described the latest restrictions as “targeted and discriminatory,” arguing that the measures are unlikely to achieve their intended goals and could instead harm US companies while accelerating China’s technological development .
Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times that treating Chinese companies differently simply because their headquarters are in China “runs counter to the principles of the multilateral trading system and lacks a solid legal or economic basis” .
Ma Jihua, a veteran telecom industry observer, noted that the restrictions could create long-term risks for Nvidia and the broader US semiconductor industry. “By limiting access to the Chinese market, US policies may provide more room for competitors and domestic Chinese suppliers to grow,” he said . Over time, losing access to one of the world’s largest technology markets could weaken the global competitiveness of American chipmakers .
Innovation Under Pressure: China’s Tech Self-Sufficiency
Despite the escalating restrictions, China’s technology sector has continued to advance, with officials and analysts framing the pressure as a catalyst for domestic innovation rather than a fatal blow.
According to Chinese media reports, China’s AI chip self-sufficiency ratio has risen from approximately 10 percent in 2021 to 41 percent in 2026 — a more than fourfold increase in just five years . Morgan Stanley projects that this ratio could rise to around 86 percent by 2030 .
Huawei’s rotating chairman, Xu Zhijun, was quoted in recent days as saying that the company is “thankful for the pressure that the US has applied” on China. “If the US hadn’t forced our country, our companies, and our industry, we wouldn’t have done something like this,” Xu said, referring to the company’s development of alternative technologies .
Chinese state media has amplified this narrative, arguing that “pressure in, innovation out” has become the defining dynamic of the US-China technology rivalry. “Every fresh round of restrictions ends up proving the same ironic lesson: You can disrupt supply chains, but you can’t put handcuffs on innovation,” a Global Times commentary argued .
The ‘Five Eyes’ Espionage Allegations
The economic restrictions have been accompanied by a separate intelligence controversy. On Wednesday, the US Justice Department and FBI announced they had seized 13 internet domains, which they alleged were being used by Chinese intelligence to gather information from individuals with US security clearances . The DOJ claimed that Chinese intelligence services used AI-generated content to trick, recruit, or coerce current and former security clearance holders into sharing sensitive information .
Chinese Foreign Ministry spokesperson Lin Jian rejected the allegations as “totally baseless.” “We oppose vilifying China by peddling the so-called ‘Chinese spy’ narrative,” Lin said . He added that “the one that has been openly and extensively engaged in espionage and intelligence gathering worldwide is none other than the US itself” .
The US action followed a similar “warning” issued by the UK Security Service (MI5) and other Five Eyes intelligence agencies, which alleged that Chinese intelligence services were approaching individuals through fake online recruitment schemes . The Chinese Embassy in London described those allegations as “entirely fabricated” and constituting “malicious slander” .
Temporary Trade Detente: The One-Year Pause
Despite the ongoing tensions, there have been some signs of temporary de-escalation. The Trump administration has agreed to delay a major export control rule — the so-called “affiliates rule” — for one year, following the recent US-China trade truce reached after the Trump-Xi meeting in Beijing .
The rule, introduced in late September, was designed to prevent sanctioned Chinese companies such as Huawei from using subsidiaries to access restricted US technology. Its implementation had drawn a sharp rebuke from Beijing, which labeled it “extremely egregious” and retaliated with export controls on rare-earth minerals critical to global manufacturing .
Under the terms of the truce, the US agreed to pause the affiliates rule for 12 months, while China committed to delay the expansion of its rare-earth export restrictions by a year . The Commerce Department’s Bureau of Industry and Security said the pause will spare companies from filing roughly 245 additional license applications over the next year .
However, BIS noted that a “second phase” of the affiliates rule is scheduled to take effect once the delay ends in November 2026, suggesting that tensions could flare again next year if no further agreement is reached .
China’s Warning: “Resolute Countermeasures”
The Ministry of Commerce warned on Saturday that if the US does not halt its suppression of Chinese companies, China will take “resolute and strong countermeasures” and “all consequences and responsibilities arising therefrom shall be borne by the US side” .
The ministry urged Washington to “return to the right track of building a constructive China-US relationship of strategic stability” and to provide Chinese companies with “fair, just and non-discriminatory treatment” .
Foreign Ministry spokesperson Lin Jian echoed this stance at a press briefing earlier this week. “We urge the US to correct its wrongdoings and stop the unwarranted suppression of Chinese businesses,” Lin said, adding that “China will do what is necessary to firmly protect the legitimate and lawful rights and interests of its companies” .
The ‘China Threat’ Pretext
Chinese officials have consistently argued that the “national security” justification has become a catch-all pretext for US efforts to maintain technological and economic dominance. Foreign Ministry spokesperson Mao Ning made a similar point in February regarding US military expansion in the Asia-Pacific, stating that Washington’s moves under the pretext of the “China threat” are “not conducive to regional peace and stability” and “run counter to the interests of regional countries” .
The Global Times editorial concluded that the US strategy of targeting Chinese technology has failed to achieve its intended goals. “The attempt to halt China’s development by simply using an administrative list is doomed to fail,” the editorial stated . It argued that the blacklist is likely to “stand as a testament to Chinese companies’ success in overcoming technological barriers and external restrictions” .
As one Chinese official put it: the US may build higher walls, but every fresh round of restrictions ends up proving the same ironic lesson — “higher walls, stronger innovation” .
Frequently Asked Questions (FAQs)
Q1: How many Chinese companies are now on the Pentagon’s “military companies” blacklist?
A: The Pentagon updated its list this week to include 188 Chinese entities. The list spans artificial intelligence, e-commerce platforms, electric vehicles, batteries, semiconductors, robotics, and biopharmaceuticals .
Q2: What is the US “affiliates rule” and why was it delayed?
A: The affiliates rule was designed to prevent sanctioned Chinese companies such as Huawei from using subsidiaries to access restricted US technology. Its implementation drew a sharp rebuke from Beijing. As part of a trade truce following the Trump-Xi meeting, the US agreed to pause the rule for 12 months, while China delayed the expansion of its rare-earth export restrictions .
Q3: What did China say about the US Justice Department’s seizure of 13 internet domains?
A: Chinese Foreign Ministry spokesperson Lin Jian rejected the allegations as “totally baseless,” stating that “the one that has been openly and extensively engaged in espionage and intelligence gathering worldwide is none other than the US itself” .
Q4: How has China’s AI chip self-sufficiency changed in recent years?
A: According to Chinese media reports, China’s AI chip self-sufficiency ratio has risen from approximately 10 percent in 2021 to 41 percent in 2026. Morgan Stanley projects that this ratio could rise to around 86 percent by 2030 .
Q5: What countermeasures has China threatened?
A: China’s Ministry of Commerce warned that if the US does not halt its suppression of Chinese companies, China will take “resolute and strong countermeasures” and that “all consequences and responsibilities arising therefrom shall be borne by the US side” .
This is a developing story. Reflecto News will continue to provide updates on US-China trade and technology tensions, including any further expansions of the Pentagon’s blacklist and China’s countermeasures.
