US delay on China export restriction could defang it

Washington's decision to delay a rule on export restrictions for Chinese companies, announced by China after Thursday's summit meeting with U.S. President Donald Trump, could end up making the measure ineffective, former U.S. officials said.



The one-year suspension of the so-called affiliates rule, which had sought to prevent sanctioned Chinese companies from using subsidiaries to bypass U.S. controls on tech exports, would give those companies the breathing room they need to create workarounds, the officials said.



The rule, unveiled on September 29, barred Chinese firms at least 50% owned by sanctioned companies from receiving U.S. tech exports. It drew strong opposition from Beijing.



"This pause may give Chinese entities sufficient time to reorganize corporate structures and holdings to circumvent any re-imposition of the (rule)," said Nazak Nikakhtar, who served at the Commerce Department during Trump's first term.



"Chinese companies have, over the years, become very adept at circumventing U.S. laws," she added.