US adds 37 Chinese entities on trade restriction list over spy balloon incident

Spy balloon incident: The Biden administration escalated tensions between Beijing and Washington on Thursday by placing 37 Chinese entities on a trade restriction list, citing their alleged involvement in supporting a spy balloon incident last year.

Among the entities targeted by the Commerce Department are units of China Electronics Technology Group, accused of seeking American technology to advance China's quantum capabilities with potential military applications.

State-owned China Electronics Technology Group, a major military equipment supplier according to media reports, has yet to respond to the allegations.

In response, the Chinese embassy in Washington denounced the move as "blatant economic coercion and bullying," pledging to defend the rights of Chinese firms and institutions.

The decision underlined the Biden administration's response to the spy balloon incident, which stirred political outcry in Washington and led to the cancellation of Secretary of State Antony Blinken's planned visit to China.

Previously, in February 2023, the Commerce Department had added several companies and a research institute to the entity list for their alleged support of China's military modernisation efforts, particularly aerospace programs linked to the People's Liberation Army.

China has dismissed claims regarding the spy balloon, attributing the incident to a weather-related anomaly and accusing the US of overreacting.

The entity list, used as a tool to curb technology flow to China, imposes restrictions on American suppliers intending to do business with the targeted entities.

In addition to the entities linked to the spy balloon incident, the Biden administration added a few Chinese companies to the list for attempting to procure American components for drone production for military purposes and for shipping controlled items to Russia.

(With Reuters inputs)