Sales to China represent 65% of Qualcomm's sales revenue. Photo: AFP

Beijing revealed some more cards in the hand it is preparing to play in the high-stakes trade battle with the United States, announcing a new blacklist of foreign firms.

China’s Ministry of Commerce said it will establish a list of “unreliable entities,” following the recent decision by the Trump administration to ban US firms from doing business with Chinese telecommunications giant Huawei.

The move is a clear response to the blacklisting of Huawei, targeting any foreign companies that “block or cut supplies to Chinese firms with non-commercial purposes.”

Depending on what the consequences will be for being placed on the list, the move could inch the global economy closer to bifurcation, with US and Chinese companies being forced out of each other’s home markets.

The move comes amid reports that Beijing is moving ahead with preparations to limit rare earth element exports to the United States. The resource is needed for the production of many technologies, including some vital for the military. Around 80% of US rare earths imports is supplied by China.

The Ministry of Commerce did not say which companies are going to be added to the list, but said that “detailed measures” will be announced soon.

The US restrictions on doing business with Huawei have hit the company hard, with many multinational companies playing it safe by announcing they will halt cooperation. That includes Google, which said that it will no longer provide services for Huawei devices to run the Android operating system.

While Google is already largely cut out of the Chinese market, other firms such as chipmaker Qualcomm are heavily dependant on sales in China. That revenue stream will already take a massive hit from lost sales to Huawei, but being blocked out of the rest of the market will surely add salt in the wound.

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