China Blacklist to Hit Firms Not Producing in China: Think Tank

(Bloomberg) -- China’s newly announced blacklist will mostly target companies that supply China’s market through trade and not necessarily firms that are invested and producing within China, according to a researcher at a think tank affiliated with the Ministry of Commerce.

China would welcome firms moving their production onshore so as to be able to supply the Chinese market, Cui Fan, director of research at the China Society for World Trade Organization Studies said in an interview published by the People’s Daily Monday.

China announced it was setting up a list of so-called “unreliable" entities last week but hasn’t released any details about the conditions for being added to the list, or which companies are included. The investigation of FedEx Corp may suggest what’s in store, although at the weekend the ministry played down fears it would be used as retaliation tool in the trade war.

The new mechanism will list foreign enterprises, organizations and individuals that don’t obey market rules, violate contracts and block, cut off supply for non-commercial reasons or severely damage the legitimate interests of Chinese companies, according to the ministry’s announcement last week.

The list will be a dynamic one, according to Cui, and blacklisted companies will be allowed to appeal and may be removed from the list once they meet certain requirements.

To contact Bloomberg News staff for this story: Yinan Zhao in Beijing at yzhao300@bloomberg.net

To contact the editors responsible for this story: Jeffrey Black at jblack25@bloomberg.net, James Mayger

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