Media365
China widened its economic countermeasures against the US, imposing export controls on 10 American companies and barring 46 US firms from Chinese government procurement, in a move that underscores the deepening strategic and technological rivalry between the world’s two largest economies.
China’s Ministry of Commerce announced on Monday that it had added 10 US entities to its export control list, including defence contractors, drone manufacturers and rare earth companies. The restrictions prohibit Chinese exporters from supplying dual-use items to the affected firms and immediately halt any ongoing exports covered under China’s export control regulations.
The companies targeted by the new export controls include Aveox, Red Cat Holdings, Teal Drones, Jaia Robotics, Ball Aerospace & Technologies Corp, MP Materials Corp, USA Rare Earth and Oshkosh Defense, among others.
“Export operators are prohibited from exporting dual-use items to the aforementioned 10 entities, and organisations or individuals in any country or region are prohibited from transferring or providing dual-use items originating in China to said entities,” the commerce ministry said in a statement.
Dual-use items refer to products, technologies and materials that can serve both civilian and military purposes.
Response to Pentagon blacklist
The latest measures appear to be a direct response to Washington’s decision to expand its list of Chinese companies alleged to have ties to China’s military.
A spokesperson for China’s commerce ministry said the restrictions were imposed in response to the “malicious actions” of the US government after the Pentagon added dozens of Chinese entities to its list of so-called “Chinese military companies”.
The move follows a June 9 decision by the US Department of Defense to reinstate Chinese technology and electric-vehicle giants Alibaba, BYD and Baidu on its Section 1260H list of companies deemed to have links to China’s military. The Pentagon said the companies were operating directly or indirectly in support of China’s military-civil fusion strategy, which seeks to integrate civilian technological capabilities into military development.
The updated Pentagon roster also includes several major Chinese firms such as Tencent, Huawei, CATL, DJI, China Mobile, China Telecom and Hikvision. Alibaba, BYD and Baidu had briefly been removed from an earlier version of the list before being restored, a move that analysts viewed as reaffirming Washington’s concerns about ties between China’s private-sector champions and the country’s defence establishment.
While inclusion on the Pentagon’s military companies list does not automatically trigger sanctions, it carries reputational consequences and can serve as a precursor to future restrictions, including export controls, procurement bans or investment curbs.
China said its latest decision was made in accordance with domestic laws governing export controls on dual-use goods and was aimed at safeguarding national security while fulfilling international non-proliferation obligations.
Procurement ban targets defence giants
In a parallel move, China’s Ministry of Finance announced that 46 US companies would be restricted from participating in government procurement activities.
The list includes some of America’s largest defence contractors, including Lockheed Martin, Raytheon and Boeing’s defence division.
The ministry said the restrictions would take effect immediately. However, companies operating in China through locally invested entities would be exempt from the procurement ban.
The procurement restrictions significantly broaden the scope of China’s retaliation beyond export controls and signal Beijing’s willingness to leverage access to its vast government purchasing market as a policy tool.
Rare earths emerge as strategic battleground
The inclusion of MP Materials and USA Rare Earth is particularly notable, highlighting the growing strategic importance of critical minerals in the US-China competition.
China remains a dominant player in the global rare earth supply chain, controlling a substantial share of processing capacity for minerals essential to electric vehicles, defence systems, semiconductors and advanced manufacturing.
Rivalry persists despite diplomatic engagement
The latest actions suggest that despite efforts by both sides to stabilise relations, economic and technological competition remains entrenched.
The Pentagon’s decision to restore Alibaba, BYD and Baidu to its military blacklist came just weeks after US President Donald Trump and Chinese President Xi Jinping met in Beijing and pledged to work towards what both sides described as a “constructive relationship of strategic stability”.
However, Washington’s continued focus on military-civil fusion concerns and Beijing’s swift retaliation through export controls and procurement restrictions underscore that national security remains at the centre of the increasingly complex US-China relationship.
Over the past several years, both countries have steadily expanded their use of sanctions, export restrictions, investment curbs and corporate blacklists, affecting industries ranging from semiconductors and artificial intelligence to defence and critical minerals.
China’s decision to simultaneously target defence contractors and rare earth companies illustrates how the contest between the two powers is increasingly centred on strategic technologies and supply-chain resilience rather than traditional trade disputes.
As both countries continue to tighten controls over sectors deemed critical to national security, businesses operating across global technology and industrial supply chains face growing uncertainty and fragmentation.
