China threatens companies with a black list

Beijing is preparing a blacklist aimed at foreign companies as trade tensions with the United States continue to advance.

The Chinese government is working to establish an “unreliable entity list” which would include foreign companies, individuals and organizations, according to a statement Friday from China’s Commerce Ministry.

Companies that violate market rules will be included in the list, according to the statement. Other targets include firms that block supplies to Chinese companies for “non-commercial reasons” or otherwise damage their interests.

The exact details of the plan will be announced soon, the statement added.

The move to create a blacklist comes after the United States hit Huawei with an export ban, effectively barring US companies from doing business with the smartphone and telecom equipment maker.

The Trump administration maintains that Huawei equipment can be used by China for spying purposes. Huawei has repeatedly denied that it poses a risk, saying the restrictions are an attempt to put it out of business.

The US campaign against Huawei, which is one of China’s most powerful tech companies, reached a pinnacle earlier this month when the Trump administration added it to a listof companies said to undermine American interests.

That move forced crucial suppliers like Google (GOOG) and ARM Holdings to cut ties with the Chinese company, while top carriers in the United Kingdom and Japan delayed the launch of Huawei smartphones.

Huawei had aimed to become the top smartphone brand globally by the end of 2020, but now the ban could pose an existential threat.

Huawei bought $70 billion worth of components and parts last year from 13,000 suppliers. Of that, about $11 billion was spent on products from US businesses including Qualcomm (QCOM), Broadcom (AVGO) and Microsoft (MSFT).

Analysts had predicted that China could target US businesses as a result of the Huawei ban. Trust between the United States and China is running at a significant low as new rounds of back and forth tariffs go into effect.