China Imposes Targeted Sanctions and Tightens Drone Export Controls on the U.S.. Beijing

Overview

• Chinese authorities announced a package of countermeasures on Aug. 5 and 6 that included sanctions on multiple U.S. entities, stricter export reviews for drones and related technologies, a security probe of imported office equipment, and limits on some U.S.-based certification work.
• Beijing said the export changes put unmanned aerial vehicles, key drone components and related dual-use technologies on a case-by-case licensing list for shipments to the United States, requiring individual export approvals.
• The State Administration for Market Regulation barred U.S.-based firms that perform follow-up factory inspections from issuing China Compulsory Certification (CCC), forcing exporters to hire non-U.S. auditors or alternative certifiers to enter the Chinese market.
• Reports differ on the exact sanctions list, with outlets variously saying six or seven U.S. entities were banned from commercial activity with China, a discrepancy the Chinese ministry did not fully reconcile in its public statement.
• The measures tighten economic and regulatory ties between the two powers, could raise costs and delays for Chinese manufacturers and foreign buyers, and risk narrowing the agenda or adding strain on the planned Xi visit to Washington in September.