China to relax export control measures against U.S. entities in trade de-escalation

China is set to remove and temporarily suspend its trade restrictions on several U.S. firms. Fifteen firms are set to see their restrictions fully removed, while action on another 16 will be paused for one year.

The ongoing trade dispute between the U.S. and China is now taking a conciliatory turn, with both countries appearing to be tending toward compromise over conflict in recent rounds. 

China will relax its export restrictions

China’s Ministry of Commerce announced on Tuesday that it will remove the export control measures against 15 U.S. entities and suspend enforcement for another 16 entities for a year, starting November 10. 

The restrictions limited Chinese companies from exporting certain goods with both civilian and military applications to the affected firms. However, with this easing of restrictions, Chinese exporters can now apply for permission to ship these products again. 

The ministry described the move as a “constructive step” that will aid the efforts to improve the trade relations between both countries after years of tension over technology, investments, and supply chains.

The announcement is a result of several months of negotiations and discussions aimed at preventing the economic ties between the U.S. and China from deteriorating further. 

Encouragingly, both sides have recently emphasized the need for “healthy competition” rather than confrontation.

Suspension of ‘unreliable entity list’ 

In a separate statement, the ministry said it will also remove or suspend the measures imposed earlier this year against several U.S. companies that were added to China’s “unreliable entity list” in March and April. The measures will be suspended for one year. 

The companies on the list allegedly endanger China’s national interests, so it restricts their ability to trade or invest in the country. Under the new arrangement, Chinese firms will be allowed to apply to resume transactions with the affected entities.

The easing of these measures is expected to help restore business activities that were disrupted by earlier trade restrictions and to present a fresh cooperative approach from Beijing. It could also reduce friction in key industries such as manufacturing, electronics, and advanced materials. 

For now, the U.S. has most of its tariffs and technology restrictions against China still in place, but it could eventually reciprocate, as it did with the tariffs. 

Aside from reducing friction in key industries, China’s decision could also boost its exports and attract foreign investment, helping improve the country’s slow economic growth in the process.

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