South China Sea: US unveils first sanctions linked to militarisation

The latest US move against Beijing cracks down on firms whose goods may support Chinese military activities

The United States has blacklisted 24 Chinese companies and targeted individuals it said were part of construction and military efforts in the South China Sea, its first such sanctions move over the disputed strategic waterway.

The US Commerce Department said the companies played a “role in helping the Chinese military construct and militarise the internationally condemned artificial islands in the South China Sea”.

Separately, the State Department said it would impose visa restrictions on Chinese individuals “responsible for, or complicit in” such action and those linked to China’s “use of coercion against south-east Asian claimants to inhibit their access to offshore resources”.

The move on Wednesday was the latest US move to crack down on firms whose goods may support Chinese military activities and comes in the run up to the US presidential election, in which both Donald Trump and Joe Biden have been sharply critical of China.

The US accuses China of militarising the South China Sea and trying to intimidate Asian neighbours who might want to exploit the area’s extensive oil and gas reserves.

US warships have sailed through the region to assert the freedom of access to international waterways, raising fears of clashes.

A US defence official, speaking on the condition of anonymity, told Reuters that on Wednesday China launched four medium-range ballistic missiles that landed in the South China Sea between Hainan Island and the Paracel Islands.

The official added that an assessment was underway to determine the type of missile launched.

The Hong Kong-based South China Morning Post newspaper quoted a source close to the Chinese military as saying that China had launched two missiles, including an “aircraft-carrier killer”, into the South China Sea on Wednesday morning in a warning to the US.

On Tuesday, China complained that the US had sent a U-2 reconnaissance plane into a no-fly zone over Chinese live-fire military drills.

The Pentagon said a U-2 flight conducted in the Indo-Pacific region was “within the accepted international rules and regulations governing aircraft flights”.

The Chinese embassy in Washington did not immediately reply to a request for comment on US announcements, but in July, Beijing said it was not afraid of any sanctions the US might impose and accused it of stirring up trouble and destabilising the region.

Washington warned last month it could respond with sanctions against Chinese officials and enterprises involved in coercion in the South China Sea after it announced a tougher stance rejecting Beijing’s claims to offshore resources there as “completely unlawful”.

China claims virtually all of the potentially energy-rich South China Sea, but Brunei, Malaysia, the Philippines, Taiwan and Vietnam also lay claim to parts of an area through which about $3tn of trade passes each year.

“This is the first time the US has levied any type of economic sanction against Chinese entities for behaviour in the South China Sea,” said Greg Poling, a South China Sea expert at Washington’s Center for Strategic and International Studies.