Beijing has sped up development of a blacklist that could be used to punish American technology firms, but officials say leaders are hesitating to pull the trigger, with some arguing a decision on the list should wait until after the U.S. election.

The debate highlights Beijing’s continued grappling with how to respond to the Trump administration without driving the relationship closer to collapse.

So far, the Chinese leadership has tried to respond in kind to Washington’s actions but has tried to avoid measures that go beyond those of the U.S. A well-timed strike can sometimes work in Beijing’s and Chinese companies’ favor. After President Trump’s campaign for a U.S. company to take over video-sharing app TikTok, Chinese regulators rolled out new export-control rules that have helped TikTok parent ByteDance Ltd. set terms that could help it avoid losing control of the platform’s U.S. operations or crucial technology.

China first announced its plan to create a blacklist of U.S. entities in May 2019, soon after the U.S. restricted telecom giant Huawei Technologies Co.’s access to U.S. components and technology. But Beijing refrained from specifying any companies or individuals for the list as both countries’ trade negotiators were engaged in the talks that eventually led to the signing of a “phase one” trade agreement in January.

As the Trump administration has intensified its attacks on some of China’s best-known companies—also including Tencent Holdings Inc., which runs the WeChat messaging and payments app—the list has gained urgency.

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