China sanctions Raytheon and Lockheed Martin
If China is serious about sanctions of semiconductors from”Taiwan, China” then this is a serious development.
There is also this:
“Lockheed Martin, now on the banned entity list, may have to source its rare-earth supply, especially that of heavy rare-earth elements, from elsewhere”
I wonder how this may be reported tomorrow by the China apologists.
FLASH: CHINA BANS IMPORTS/EXPORTS INVOLVING RAYTHEON AND LOCKHEED – CRIPPLES U.S. DEFENSE INDUSTRY!
FLASH TRAFFIC: CHINA’S COMMERCE MINISTRY HAS BANNED SENIOR EXECS OF RAYTHEON MISSILES & DEFENSE, AND LOCKHEED MARTIN, FROM ENTERING, WORKING, STAYING, AND RESIDING IN CHINA.
CHINA WILL NOW ENFORCE ITS FEB 16 BAN ON CHINESE ENTERPRISES FROM CONDUCTING IMPORT & EXPORT ACTIVITIES WITH ABOVE U.S. COMPANIES.
This is said to include Microchips from “Taiwan, China.”
Of course, the U.S. considers Taiwan to be “independent” but yet adopted the “one China policy.”
If Raytheon and Lockheed-Martin cannot engage in Imports/Exports to or from China, and if the ban on Microchips is enforced, the two most major players in U.S. National Defense manufacturing are immediately crippled.
In addition, the U.S. weapons SALES to Taiwan, will not be able to take place because the missiles and such that Taiwan is trying to buy, cannot now be shipped to Taiwan.
Put simply, China just put a total halt to US defense sales to Taiwan, and crippled the US Defense manufacturing industry by cutting off microchips.
Raytheon and Lockheed Martin face serious risk if their rare-earth supplies are also affected by the sanctions, according to Wu Chenhui, an independent industry analyst who follows the rare-earth industry.
Wu told the Global Times that Lockheed Martin, now on the banned entity list, may have to source its rare-earth supply, especially that of heavy rare-earth elements, from elsewhere.
Given China’s dominant position in global rare-earth supply, substitutes may not be found in time. This would mean production of the company’s F35 jet and many other high-tech weapon systems may face a temporary slowdown or suspension.
If China decides to expand the range of its ban to components produced by other countries that contain Chinese-made rare-earth elements, the depth and scope of the new bans will be deeper and wider, Wu noted.
From the Chinese Global Times
This likely marks the first time that specific companies have been added to the country’s unreliable entities list, which has been in the making for about three years, demonstrating China’s resolve to punish foreign entities that undermine China’s national sovereignty, security and development interests, Chinese analysts noted.
In a statement on Thursday, the Ministry of Commerce (MOFCOM) said that it has decided to put Lockheed Martin and Raytheon, which participated in arms sales to China’s Taiwan region, on the unreliable entities list, effective immediately.
The ministry also imposed five measures against the two firms, including banning them from conducting import and export activities related to China and from adding new investments in China. Senior executives of the two companies are also banned from entering China, while work and residency permits for senior executives will be revoked or not granted, according to MOFCOM.
Most notably, MOFCOM imposed separate fines on the two companies that are twice the amount of their arms sales to Taiwan island. They are to pay the fines within 15 days or face higher fines, the statement reads.
In February 2022, the US government approved a possible $100 million sale of military equipment and services to Taiwan, and the main contractors would be Lockheed Martin and Raytheon, according to Reuters.
After the US’ move in February 2022, China’s Foreign Ministry announced countermeasures against the two firms with relevant stipulations in China’s Anti-Foreign Sanctions Law, another mechanism for punishing foreign entities that harms China’s sovereignty and security interests.
“The unreliable entities list mechanism was launched a long time ago, but this should be the first time that specific companies have been included,” which shows, first and foremost, that the mechanism has started to be implemented, Gao Lingyun, an expert at the Chinese Academy of Social Sciences in Beijing, told the Global Times on Thursday.
China first announced plans to establish the unreliable entities list in March 2019, as the US government waged a trade war against China and cracked down on Chinese firms with its so-called Entity List. In September 2020, regulations on the list were released and took effect. According to the regulations, the list targets foreign entities that are involved in activities that endanger China’s national sovereignty, security or development interests and take discriminatory measures against Chinese entities and individuals.
“Not only have these two companies not been restrained in recent years, but they have been vigorously agitating for arms sales to Taiwan, seriously challenging the red line regarding the one-China principle,” Xin Qiang, deputy director of the Center for American Studies at Fudan University, told the Global Times on Thursday.
On Wednesday, the Chinese Foreign Ministry vowed to impose countermeasures against US entities that undermine China’s sovereignty and security after Washington shot down a Chinese civilian airship by force and imposed sanctions against several Chinese entities.
Analysts noted that while the real effects of the sanctions imposed on Lockheed Martin and Raytheon remain to be seen, the move on Thursday will still hit the two US companies hard in various ways, even though they have a limited presence in the Chinese market.
“This will affect their international reputation and impact their performance in the capital market,” Gao said, adding that other companies related to the two defense contractors could also be affected.
Also, the two companies could face serious risk if their rare-earth supplies are affected by the sanctions, according to Wu Chenhui, an independent industry analyst who follows the rare-earth industry.
Wu told the Global Times on Thursday that Lockheed Martin, now on the entity list, may have to source its rare-earth supply, especially that of heavy rare-earth elements, from elsewhere.
Given China’s dominant position in global rare-earth supply and that substitutes may not be found in time, production of the company’s F35 jet and many other high-tech weapon systems may face a temporary slowdown or suspension.
If China decides to expand the range of its ban to components produced by other countries that contain Chinese-made rare-earth elements, the depth and scope of the counterstrike will be deeper and wider, Wu noted.
Moreover, Thursday’s sanctions against Lockheed Martin and Raytheon offers a strong deterrence to other foreign entities that seek to undermine China’s national sovereignty, security and development interests, Xin said.
China to ban imports and exports by Lockheed, Raytheon over Taiwan arms sales
Lockheed Martin and Raytheon’s arms sales to Taiwan include the jointly produced Javelin anti-tank missile
China announced new details about sanctions it imposed on U.S. defense contractors Lockheed Martin and Raytheon earlier this year over their continuing arms sales to Taiwan.
The People’s Republic of China regards Taiwan, a self-governing democracy, as a rogue province and has threatened to “reunify” it with the mainland by force if necessary — a task that would be easier if it were able to convince American arms manufacturers and policymakers to cut off weapons sales to Taiwan.
China’s commerce ministry announced Tuesday that the sanctions against Lockheed Martin and Raytheon feature a ban on exports and imports by the two companies from and to China as a means “to prevent Chinese products from being used in their military business.”