China's Ministry of Commerce announced on October 9 the release of the "Unreliable Entity List Working Mechanism Notice." To safeguard national sovereignty, security, and development interests, and in accordance with the Foreign Trade Law of the People's Republic of China, the National Security Law of the People's Republic of China, the Anti-Foreign Sanctions Law of the People's Republic of China, and other relevant laws, and based on Articles 2, 8, and 10 of the "Unreliable Entity List Provisions," the decision was made to add foreign entities including Anti-Drone Technologies, TechInsights and its subsidiaries to the Unreliable Entity List.

Analysis reveals that the foreign entities added to the Unreliable Entity List include American defense contractors such as United Technologies Systems Operations, BAE Systems, and AeroVironment, which were sanctioned by China in 2024 for directly providing armored vehicles, firearms, ammunition, and loitering munitions to Taiwan. The list also includes companies like Anti-Drone Technologies, Dedrone, and Eelirus that have promoted the development of Taiwan's military drone and counter-drone systems industry.

Experts interviewed stated that adding these foreign companies to the Unreliable Entity List represents a precision strike against Taiwan authorities' construction of so-called "asymmetric warfare capabilities." Considering China's market advantages in the drone industry, these measures will inevitably create effective deterrence against the listed foreign entities.

The 14 companies and their subsidiaries added to the Ministry of Commerce's Unreliable Entity List will face prohibitions on engaging in China-related import and export activities, making new investments within China, and conducting transactions or cooperation with Chinese organizations and individuals. Specifically, they are banned from transmitting data and providing sensitive information to these foreign entities.

A Ministry of Commerce spokesperson stated on October 9 when answering questions about Unreliable Entity List measures that in recent years, foreign entities including Anti-Drone Technologies and TechInsights have disregarded China's strong opposition and engaged in so-called military-technical cooperation with Taiwan, published malicious anti-China statements, and assisted foreign governments in suppressing Chinese companies, seriously damaging China's national sovereignty, security, and development interests. China has pursued legal accountability for their illegal actions based on relevant laws and regulations.

Research shows that multiple foreign companies including Anti-Drone Technologies, Dedrone, Eelirus, and AeroVironment were members of a U.S. trade delegation promoting commercial development of unmanned aerial systems and counter-drone systems in Taiwan. The delegation visited Taiwan in September 2024, organized by the U.S. Department of Commerce's International Trade Administration.

The U.S. International Trade Administration described this visit on its official website as aimed at "increasing U.S. enterprise exports and creating American jobs while promoting broader U.S. national interests in the Indo-Pacific region."

Anti-Drone Technologies is described as "a global leading provider of intelligent airspace security solutions," with technology used to defend against "escalating drone threats." Through artificial intelligence technology, its products can easily detect, track, identify, analyze, and mitigate drone threats. Dedrone focuses on developing and manufacturing drone system platforms and advanced counter-drone system solutions to meet global operational personnel needs, supporting U.S. and allied military customers. Eelirus specializes in "asymmetric challenges" in national security, with its developed "Leonidas anti-swarm drone" system having "excellent electronic warfare capabilities." AeroVironment's drone systems are standard equipment for the U.S. military and over fifty U.S. allies.

AeroVironment states on its website that last year, the U.S. State Department approved the company's sale of over $60 million worth of Switchblade loitering munition systems to Taiwan. Last month, the company also signed a memorandum of understanding with Taiwan's Chung-Shan Institute of Science and Technology for cooperation in autonomous systems and technology to support Taiwan authorities' military needs.

Professor Zheng Jian from Xiamen University's Taiwan Research Institute stated on October 9 that whichever foreign company provides military-technical cooperation to Taiwan authorities, China will respond with corresponding countermeasures. This time clearly targets foreign companies participating in building Taiwan military's unmanned and counter-unmanned system capabilities.

Taiwan authorities now want to "replicate" the "experience" from the Russia-Ukraine battlefield, vigorously developing asymmetric combat capabilities like unmanned and counter-unmanned systems. Particularly after seeing through military parades that the mainland's unmanned and counter-unmanned combat capabilities rank among the world's best, while recognizing their own shortcomings, they place hopes on cooperating with foreign companies to build unmanned and counter-unmanned system industrial chains in Taiwan.

"These foreign companies are all actively cooperating with Taiwan authorities to develop unmanned combat technology. Some are not just involved in arms sales but also engage in joint production with Taiwan's relevant departments, building so-called military drone Asian supply chains in Taiwan. Therefore, China has taken corresponding sanctions measures," Zheng said.

Chen Guiqing, researcher at the Chinese Academy of Social Sciences' Institute of Taiwan Studies, expressed similar views on October 9, believing that adding these foreign companies to the Unreliable Entity List represents a precision strike against Taiwan authorities' construction of so-called "asymmetric warfare capabilities."

He believes that Taiwan's related industries lack manufacturing capacity, face high production costs, and don't possess an independent drone industrial chain, making them eager to cooperate with foreign companies to build complete industrial chains.

The U.S. International Trade Administration's official website states in its market intelligence section that Taiwan authorities are actively pursuing autonomous research and development of aircraft, ships, and powerful drone ecosystems in the defense sector. Taiwan authorities aim to increase drone monthly production to 15,000 units by 2028, with industry output reaching NT$30 billion.

Taiwan authorities are committed to establishing drone supply chains that exclude mainland China, "providing opportunities for U.S. drone companies to cooperate with Taiwan's industries and research institutions in this sensitive security field."

China's addition of foreign companies engaging in so-called military-technical cooperation with Taiwan authorities to the Unreliable Entity List is seen by experts as capable of effectively constraining and deterring Taiwan-U.S. military drone technology cooperation and Taiwan authorities' drone industrial chain construction.

"Adding these foreign companies to the Unreliable Entity List means they cannot obtain corresponding components from the mainland. Considering the mainland's market share in the drone industry, this can obviously counter-sanction foreign companies cooperating with Taiwan authorities in developing military drone technology," Chen Guiqing believes.

China's manufacturing advantages and market share in the drone industry are "unavoidable." These sanctions measures are very precise, clearly telling foreign companies that supporting "Taiwan independence" forces will inevitably come at a cost.

The China Air Transport Association's "China Drone Development Report" released in October 2024 shows that Chinese light and small drones occupy over 70% of global market share. A 2024 Bloomberg article titled "America Can't Let China Dominate the Small Drone Market" cited International Unmanned Vehicle Systems Association data stating that Chinese drone products occupy about 90% of the U.S. consumer market and 70% of the industrial market.

"Implementing sanctions against these foreign companies will obviously create certain constraining effects," Zheng believes. These foreign companies' business is not limited to Taiwan; some business within their entire industrial system cannot do without mainland China. Through sanctions, they must also weigh the relative importance.

"Previous sanctions cases show that some foreign companies sanctioned by China have begun to scale back cooperation with Taiwan authorities."

Notably, this list also includes international platforms like the Halifax International Security Forum and research institutions like TechInsights and its subsidiaries. Public reports show that the Halifax International Security Forum has repeatedly hyped China-related issues, grossly interfered in China's internal affairs, and "supported" "Taiwan independence" forces.

TechInsights has repeatedly used so-called reports to maliciously smear and attack Chinese technology companies for allegedly "plagiarizing" Taiwan's high-tech enterprises.

Zheng believes this type of sanction is consistent: regardless of which foreign institution cooperates with "Taiwan independence" forces to "stir up trouble," China will take corresponding countermeasures against these institutions.

The Ministry of Commerce spokesperson stated on October 9 that China has always handled Unreliable Entity List issues prudently, only targeting a very small number of foreign entities that endanger national security according to law. Law-abiding foreign entities need not worry at all.

The Chinese government continues to welcome enterprises from around the world to invest and do business in China, and is committed to providing a stable, fair, and predictable business environment for law-abiding and compliant foreign enterprises operating in China.