US sanctions Chinese firms for construction projects in South China Sea

The US on Wednesday imposed sanctions on Chinese companies and nationals who have taken up "illegal" construction projects in the South China Sea as part of Beijing's "expansionist agenda."

China claims sovereignty over most part of the resource-rich South China Sea, rejecting counter claims of the Philippines, Vietnam, Malaysia, Brunei and Taiwan.

"Today, the Department of State will begin imposing visa restrictions" on Chinese individuals responsible for, or complicity in the large-scale reclamation, construction, or militarisation of disputed outposts in the South China Sea, US Secretary of State Mike Pompeo said.

Individuals coercing Southeast Asian claimants to inhibit their access to offshore resources will also be under the visa restrictions, Pompeo said.

These individuals, he said, will now be inadmissible into the United States, and their immediate family members may be subject to these visa restrictions as well.

Further, the US Department of Commerce has added 24 Chinese state-owned enterprises to the 'Entity List', including several subsidiaries of China Communications Construction Company (CCCC).

Pompeo said since 2013 China has used its state-owned enterprises to dredge and reclaim more than 3,000 acres on disputed features of the South China Sea, destabilising the region, trampling on the sovereign rights of its neighbouring countries, and causing untold environmental devastation.

The CCCC has led the destructive dredging of China's South China Sea outposts and is also one of the leading contractors used by Beijing in its global "One Belt One Road" strategy, he said.

The CCCC and its subsidiaries have engaged in corruption, predatory financing, environmental destruction, and other abuses across the world, Pompeo said.

Asserting that China must not be allowed to use the CCCC and other state-owned enterprises as "weapons to impose an expansionist agenda," Pompeo said the US will act until it sees Beijing discontinue its coercive behaviour in the region.

And we will continue to stand with allies and partners in resisting this destabilising activity, he said.

In a separate statement, the Commerce Department said it has added 24 Chinese companies to the 'Entity List' for their role in helping the Chinese military construct and militarise the internationally condemned artificial islands in the South China Sea.

Despite protests from the United States and other countries, the Chinese government has been rapidly building the artificial islands since 2013, enabling the Communist Chinese Party's (CCP) militarisation of disputed outposts in the South China Sea to undermine the sovereign rights of US partners in the region, the department said.

"The United States, China's neighbours, and the international community have rebuked the CCP's sovereignty claims to the South China Sea and have condemned the building of artificial islands for the Chinese military," said Commerce Secretary Wilbur Ross.

"The entities designated today have played a significant role in China's provocative construction of these artificial islands and must be held accountable," he added.

Since 2013, the CCP has dredged and constructed more than 3,000 acres across seven features in the South China Sea, including air defense and anti-ship missile features.

In addition, the Chinese dredging and construction of certain outposts violates the sovereign rights of the Republic of the Philippines, as determined by the Permanent Court of Arbitration in its July 2016 ruling in a case brought by the Philippines against China, said the Commerce Department.

In the Entity List additions, the commerce department said these entities enabled China to construct and militarise disputed outposts in the sea.

The US and Chinese diplomatic relations have spiralled after the coronavirus outbreak, with President Donald Trump saying Beijing could have done more to restrict the virus from spreading globally. Tensions have also escalated over trade malpractices.

In recent months, the US has stepped up its naval presence in the South China Sea, vowing to protect navigation freedom and rejecting China's claims over sovereignty.