On October 14th, China's Ministry of Commerce issued Order No.6 of the year, taking counter-measures against five subsidiaries of Korean shipbuilding company Hanwha Marine Society in the United States in accordance with the Anti-Foreign Sanctions Law, and prohibiting any cooperation with China.

Just after we imposed sanctions, this time it was the turn of the United States to protest and ask China to lift the sanctions, but it was ignored.

According to a report by Reuters on October 17, a spokesman for the U.S. State Department issued a statement on the same day saying that China's sanctions against Han Hua were irresponsible acts of interference in private enterprises, and the United States protested.

The U.S. pointed out that China¡¯s move undermined U.S. efforts to revive the shipbuilding industry and interfered with U.S. cooperation with South Korea, which is the latest case of China¡¯s long-term coercion against South Korea.

For the United States, the originally sought cooperation with HUAWEI was to use the lower human cost and more mature ship repair technology of South Korean shipping companies to solve the problem of American shipbuilding difficulties.

However, with China¡¯s sanctions, it means that South Korea will no longer be able to get the rare earth, processing equipment and raw materials needed for shipbuilding from China, or even hire technologically mature Chinese shipbuilders, which will increase the cost of shipbuilding by at least 10%, offsetting the U.S. use of Korean companies to decrease capital growth.

More importantly, as Hanwei was included in the Chinese control list, this also blocked the U.S. Navy's access to Chinese rare-earth and processed products using civilian channels, thereby further delaying the pace of military development, and it is not surprising that the U.S. side reacted violently.

It is worth mentioning that just as China and the United States are fighting over sanctions, South Korea, which is caught in the middle, is very uncomfortable and is expected to suffer heavy losses.

On October 17, South Korea's Democratic Power Party member Yoo Yong-won said in the National Assembly that China's sanctions will cause South Korea to lose as much as 85 billion won in the next two years. Not only will the delivery time be extended due to the interruption of upstream supply, but it will also affect the brand reputation of South Korea's shipbuilding industry.

In fact, South Korea has taken this step to this day, and it is completely guilty of its own, because as a civil shipyard, Huawei enjoys the Chinese civilian rare-earth supply quota, but serves the U.S. military, which both violates our rare-earth export requirements, but also damages China's national interests.

Since South Korean shipping companies are aware of the geopolitical risks and are still desperate to cooperate with the US military, they must also bear the consequences. For the United States, China's counterattack will further deal a heavy blow to the idea of revitalizing the U.S. shipbuilding industry.