China Retaliates with Sanctions, Tightens Drone Export Controls Ahead of Xi-Trump Summit

China has announced a fresh round of sanctions against the United States and several American companies, alongside tighter export controls on drones and related technologies, in a move that escalates tensions between the world's two largest economies ahead of a planned summit between Chinese President Xi Jinping and US President Donald Trump next month.

Beijing described the measures as a direct response to recent actions by Washington targeting Chinese firms, signalling that the ongoing strategic and technological rivalry between the two powers remains far from resolved despite efforts to maintain what both sides have described as "constructive strategic stability."

In a statement on Wednesday, China's Ministry of Commerce said it had imposed sanctions on multiple American entities, including a biotechnology company and a resource analytics firm, while restricting exports of drones, drone components and associated technologies to the United States.

According to the ministry, six of the sanctioned firms were added to China's countermeasures list in retaliation for Washington's decision last week to ban imports from 43 Chinese companies accused of involvement in alleged human rights abuses against Uyghurs and other minority groups.

A seventh American company was sanctioned over the US Federal Communications Commission's decision last month to prohibit imports of new humanoid and quadruped robots products largely manufactured in China as well as power converters.

Under the sanctions, Chinese individuals and organisations are prohibited from conducting business or engaging in cooperation with the listed American firms.

The latest measures come after the US FCC had already banned the import and sale of new drone models and critical drone equipment produced by foreign manufacturers, including Chinese companies, on national security grounds. China, the world's leading producer of drones, has in recent years tightened export controls on the technology.

Relations between Beijing and Washington have deteriorated further in recent weeks following additional US measures, including sanctions on Chinese shipping operators accused of transporting Iranian fuel, the addition of two leading Chinese civilian universities to a Pentagon blacklist, and tariffs of between 10 and 12.5 per cent on imports from dozens of countries, including China, over allegations related to forced labour.

The Trump administration has also warned of possible sanctions against Chinese artificial intelligence companies, further fuelling tensions over technology and trade.

Despite the growing diplomatic friction, both countries continue preparations for a high-level meeting between Xi and Trump expected to take place in the United States next month.

Senior economic officials from both countries held virtual trade talks last week, while a Chinese vice foreign minister travelled to the US in July in what analysts viewed as preparatory discussions ahead of the anticipated summit.

The meeting is expected to provide both leaders with an opportunity to address mounting trade disputes, technology restrictions and broader geopolitical issues affecting bilateral relations.