China restricts exports to US defense firms after tech sanctions

China on Monday imposed sanctions on 10 U.S. military-related companies in response to Washington's recent decision to bar several leading Chinese technology firms from U.S. defense contracts.

China's Commerce Ministry said domestic companies would be prohibited from exporting "dual-use" items — goods with both civilian and military applications — to the sanctioned firms. The companies include military drone manufacturers and businesses involved in rare earth mining.

The ministry said the measures were intended to safeguard China's national security and were a response to what it described as the U.S. government's "wrongful expansion" of its list of Chinese military companies.

In a separate move, China's Finance Ministry announced that government agencies would be barred from purchasing products from 46 American companies, including several units of Lockheed Martin, Raytheon and General Dynamics. The ministry did not provide a reason for the procurement ban.

Earlier this month, the U.S. Defense Department added several Chinese technology companies, including Alibaba and Baidu, to its list of firms it says have ties to the Chinese military. Baidu rejected the designation, calling it "totally baseless."

The designation bars the companies from obtaining U.S. military contracts.

China's Commerce Ministry had said the U.S. action contradicted the understanding reached between Chinese President Xi Jinping and U.S. President Donald Trump during Trump's visit to China in May.

In Monday's announcement, the ministry also said companies and individuals in third countries would be prohibited from transferring Chinese dual-use items to the sanctioned American firms. However, it said Chinese companies could apply for export approval if the goods were "genuinely necessary."

The 10 sanctioned companies are AVEOX of Simi Valley, California; Red Cat Holdings and Teal Drones of South Salt Lake, Utah; IMSAR of Springville, Utah; Jaia Robotics of Bristol, Rhode Island; Ball Aerospace & Technologies of Broomfield, Colorado; Oshkosh Defense of Oshkosh, Wisconsin; L3Harris Maritime Services of Norfolk, Virginia; MP Materials of Las Vegas; and USA Rare Earth of Stillwater, Oklahoma.