China says U.S. block on nuclear firms a 'misuse' of export controls

SHANGHAI (Reuters) - A U.S. decision to stop China General Nuclear Power Corp (CGN) and its subsidiaries from dealing with U.S. companies was a misuse of export control measures and would harm both U.S. and Chinese firms, China’s foreign ministry said.

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Washington this week said CGN was involved in activities contrary to the national security and foreign policy interests of the United States and would be added to an “Entity List” of firms banned from doing business with U.S. enterprises.

“China resolutely opposes the U.S. side harming the interests of China and the world through unilateralist and protectionist policies,” Foreign Ministry spokeswoman Hua Chunying said in a statement issued late on Thursday.

CGN is one of China’s major state-owned reactor builders. The other firms added to the list on Wednesday include the Suzhou Nuclear Power Research Institute Co. Ltd, a CGN subsidiary that got the go-ahead to build a nuclear reactor project in Guangdong province earlier this year.

An editorial in the state-run China Daily linked the ban to the trade row between the world’s two largest economies and said the U.S. administration had abused the blacklist.

“The U.S. would do well to de-escalate the heightening tensions if it really wants to strike a deal,” it said.

The United States already tightened controls on CGN’s ability to import civil nuclear technology last year after a Chinese-American nuclear engineer was indicted for espionage.

China’s nuclear program includes technologies transferred from the U.S.-based Westinghouse, including the world’s first AP1000 third-generation reactor units on the country’s east coast.

CGN said in a statement posted on its official Wechat account late on Thursday that its inclusion on the Entity List would disrupt its supply chains and restrict commercial contracts with U.S. companies, but the impact was “controllable”.

“The suppression of CGN is an important option for the United States to hinder the development of China’s nuclear power industry,” it said.

Reporting by David Stanway; editing by Richard Pullin