US Imposes Sanctions on 6 Chinese Firms Over Spy Balloon Programs

Sailors assigned to Explosive Ordnance Disposal Group 2 recover a suspected Chinese high-altitude surveillance balloon that was downed by the United States over the weekend over U.S. territorial waters off the coast of Myrtle Beach, S.C., on Feb. 5, 2023. U.S. Fleet Forces/U.S. Navy photo/Handout via Reuters

The United States has blacklisted six Chinese entities that it found to have aided Beijing’s surveillance balloon programs, following one such balloon floating over the United States for a week gathering intelligence.

In a statement issued on Feb. 10, the Commerce Department identified five companies and a research institute involved in efforts to support “aerospace programs including airships and balloons and related materials and components” for the Chinese military, also known as the People’s Liberation Army.

The measure will restrict U.S. companies from selling products and technologies to the firms without first seeking government permission.

“The Commerce Department will not hesitate to continue to use the Entity List and our other regulatory and enforcement tools to protect U.S. national security and sovereignty,” Deputy Secretary of Commerce Don Graves said.

He described the entity list as “a powerful tool for identifying and cutting off actors that seek to use their access to global markets to do harm and threaten American national security.”

Don Graves, deputy secretary of commerce, speaks onstage during Paramount on The Vineyard at Martha's Vineyard Museum in Vineyard Haven, Mass., on Aug. 17, 2022. Adam Glanzman/Getty Images for Paramount

The spectacle of a high-altitude balloon intruding into U.S. airspace twice and traversing across the country for a week has ignited outrage in Washington and renewed focus on the threat that the Chinese regime poses to the United States and its allies.

Since downing the balloon on Feb. 4, officials have revealed it to be part of a spying program spanning 40 countries across five continents. The latest discovery from the debris recovery includes the balloon’s ability to collect electronic communications. On Feb. 10, the administration said a U.S. military jet shot down another “high-altitude object” of unknown origin that was flying over Alaska at 40,000 feet.

The six entities include Beijing Nanjiang Aerospace Technology; China Electronics Technology Group Corp. 48th Research Institute; Dongguan Lingkong Remote Sensing Technology; Eagles Men Aviation Science and Technology Group and its Shanxi branch; Shanxi Eagles Men Aviation Science and Technology Group; and Guangzhou Tian-Hai-Xiang Aviation Technology.

In this photo provided by Chad Fish, the remnants of a large balloon drift above the Atlantic Ocean just off the coast of South Carolina, with a fighter jet and its contrail seen below it on Feb. 4, 2023. Chad Fish via AP, File

Beijing Nanjiang Aerospace Technology is a unit of Shanghai-based developer Deluxe Family, which in 2015 signed a contract with state-owned Beihang University, dedicating 480 million yuan ($70.5 million) to making near-space airships. A state brokerage firm at the time praised it as a “classic example of deep civil-military fusion”—the regime’s aggressive national strategy compelling civilian Chinese companies to support its military goals—and expressed optimism for the “wide potential for future military application” coming out of the project.

The partnership yielded the country’s first military-civilian stratospheric airship, named “Yuanmeng,” roughly meaning “a dream fulfilled,” in October 2015.

Headquartered in Beijing, Eagles Men Aviation Science and Technology Group makes stealth aircraft, virtual reality training simulators, and autonomous drones and has taken part in about a dozen state military and aerospace projects. Its products have contributed to the security of the 2014 Asia-Pacific Economic Cooperation summit held in China, as well as a grand military parade in 2015 marking the 70th anniversary of the Sino–Japanese war victory, according to its website.

Guangzhou Tian-Hai-Xiang Aviation Technology, founded by a Chinese veteran who served in the antiaircraft artillery unit, produces armored scout vehicles and aircraft for civilian and military use. It has participated in a naval military drill upon invitation of armed police, deploying military drones to assist coast guard personnel to locate and arrest target ships, its website states.

Dongguan Lingkong Remote Sensing Technology, which has been linked to Beihang University, develops stratospheric airships, public registration information shows.