As global economic and geopolitical environments enter a new era, companies need to continuously develop and adjust their coherent global business strategies to secure and further expand business opportunities in all markets while minimizing political and legal risks by ensuring compliance. To assist you with that task, Mayer Brown’s US-China Trade Monthly provides news and insights related to the latest US developments impacting the US-China bilateral trade relationship. In the current issue, we will discuss: (1) US Secretary of Commerce Raimondo’s remarks on the US-China economic relationship and US efforts to outcompete China; (2) FCC banning approval of new telecommunications equipment for entities on the Covered List; and (3) the National Defense Authorization Act’s provision restricting the US government from purchasing chips manufactured by certain Chinese companies.

Secretary Raimondo Remarks on the Past and Future of the US-China Economic Relationship and US Efforts to Outcompete China

On November 30, 2022, US Secretary of Commerce Gina Raimondo gave remarks at the Massachusetts Institute of Technology of the 50th anniversary of economic relations between the US and China. Her speech set out the Biden Administration’s economic strategy in light of the US Administration’s views that the Chinese government is 1) “increasing the role of the state in society and the economy”; 2) “constraining the free flow of capital and information”; 3) “decoupling economically in a number of areas, including many technology sectors of the future”; 4) accelerating efforts to “fuse their economic and technology policies with their military ambitions”; and 5) “using non-market trade and investment practices.”

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FCC Bans Approval of New Telecommunications Equipment for Entities on the Covered List

On November 25, the Federal Communications Commission (“FCC” or “the Commission”) issued an order banning the authorization of new equipment sold by telecommunications companies regarding the Commission’s Covered List (the “Order” or “FCC Order”). This decision bans the preliminary consideration, and ultimately the sale, of new telecommunications products in the US for companies on the Covered List. Several Chinese companies are already on the Covered List; the List includes “telecommunications equipment” from Huawei Technologies (“Huawei”) and ZTE Corporation (“ZTE”), along with “video surveillance and telecommunications equipment” produced by Hytera Communications Corporation (“Hytera”), Hangzhou Hikvision Digital Technology Company (“Hikvision”), or Dahua Technology Company (“Dahua”), among other device manufacturers.

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National Defense Authorization Act Includes Provision Restricting US Government from Purchasing Chips Manufactured by Certain Chinese Companies

On December 8, Senators Chuck Schumer (D-NY) and John Cornyn (R-TX) announced they successfully included an amendment into the Fiscal Year 2023 National Defense Authorization Act (“NDAA”) that restricts the US government from purchasing products or services that incorporate semiconductors made by certain Chinese chip manufacturers, including the Semiconductor Manufacturing International Corporation (“SMIC”), ChangXin Memory Technologies (“CXMT”), and Yangtze Memory Technologies Corp (“YMTC”), along with any of their successor and affiliate entities. The restrictions enter into force five years from passage of the legislation, once funds from the CHIPS and Science Act are disbursed. Senators Schumer and Cornyn describe these companies as ones with “known links to Chinese state security and intelligence apparatuses.”

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