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The Ministry of Commerce of China File photo: VCG

China announced on Tuesday the inclusion of two US enterprises - clothing company PVH Group and biotechnology company Illumina, Inc - to the Unreliable Entity List, in order to safeguard national sovereignty, security and development interests, according to a statement released by the Ministry of Commerce (MOFCOM).

According to the statement, the two entities have violated the principle of normal market transactions by cutting normal transactions with Chinese enterprises and adopting discriminatory measures against Chinese firms, seriously jeopardizing the legitimate rights and interests of Chinese companies.

The Unreliable Entity List working mechanism will take corresponding measures against these entities in accordance with relevant laws and regulations, read the statement. The move came into effect on Tuesday.

Responding to a question regarding the inclusion of the two US enterprises to the Unreliable Entity List, a spokesperson from the MOFCOM said on Tuesday night that China always approaches the Unreliable Entity List with prudence, targeting only a handful of foreign entities that threaten China's national security. 

"Foreign entities that are honest and law-abiding have nothing to worry about. The Chinese government, as always, welcomes foreign investment, and is committed to providing a stable, fair and predictable business environment for law-abiding foreign companies operating in China," the spokesperson said.

MOFCOM's move on Tuesday came on the same day as China announced countermeasures against the US' imposition of a 10-percent tariff on Chinese products, including additional tariffs on certain US goods starting on February 10. China's State Administration for Market Regulation also said on Tuesday that it has launched a formal investigation into US tech giant Google over suspected violation of China's Anti-Monopoly Law.

"When China adds any company to the Unreliable Entity List, it is very prudent and would not add any company to the list without evidence," Li Yong, a senior research fellow at the China Association of International Trade, told the Global Times on Tuesday.

The MOFCOM said in September 2024 that it would probe PVH Group under the Unreliable Entity List framework for taking suspected discriminatory measures and other practices that violate market trading principles regarding China's Xinjiang-related products, read a notice published by the ministry.

The US company, which owns fashion brands like Tommy Hilfiger and Calvin Klein, is suspected of boycotting cotton products from Northwest China's Xinjiang Uygur Autonomous Region without any factual basis and terminating normal transactions with Chinese companies as well as other organizations or individuals, according to the Xinhua News Agency.

Li said that the unreliable entity list mechanism is aimed at protecting China's national interests, and it is also in line with international practices. "If foreign companies don't do anything to jeopardize China's interests, they have absolutely nothing to worry about. We always welcome law-abiding firms to come to China to develop and grow," the expert said.

China introduced the Unreliable Entity List in September 2020, but it was not until February 2023 that the Chinese government first added foreign entities to the list, according to Xinhua.

Most recently, in mid-January, the MOFCOM announced the inclusion of several US companies, including Pacific Rim Defense, AEVEX Aerospace, LKD Aerospace and Summit Technologies Inc, to the Unreliable Entity List for participating in arms sales to China's Taiwan region.