Volkswacht Bodensee - China sanctions five US units of South Korean ship giant Hanwha

The United States announced in April it would begin applying fees to all arriving Chinese-built and operated ships after a "Section 301" investigation found Beijing's dominance in the industry was unreasonable.

Beijing responded last week by announcing "special port fees" on US ships arriving at Chinese ports. Fees on both sides kicked in Tuesday.

The sanctioned subsidiaries are Hanwha Shipping LLC, Hanwha Philly Shipyard Inc., Hanwha Ocean USA International LLC, Hanwha Shipping Holdings LLC and HS USA Holdings Corp.

The United States' investigation and subsequent measures "severely damage the legitimate rights and interests of Chinese enterprises", Beijing's commerce ministry said in a statement.

The Hanwha subsidiaries "assisted and supported the relevant investigation activities of the US government, endangering China's sovereignty, security and development interests", it said.

Organisations and individuals in China are now banned from cooperating with them.

- 'Unfair competition' -

Separately on Tuesday, China's Ministry of Transport opened a probe into whether the US Section 301 investigation impacted the "security and development interests" of China's shipbuilding industry and supply chain.

The ministry said it would consider whether enterprises or individuals had supported the investigation, raising the prospect that more US-linked firms could face restrictions.

Washington has said its port fees are to address Chinese dominance of the global shipping sector and provide an incentive for building more ships in the United States.

The industry is now dominated by Asia, with China building nearly half of all ships launched, ahead of South Korea and Japan.

Hanwha, one of South Korea's largest shipbuilders, announced $5 billion investment in Philly Shipyard, in the US city of Philadelphia, in August.

China's commerce ministry called the US measures "typical unilateralist and protectionist actions" that constituted "unfair competition", in another statement on Tuesday.

"China urges the US to correct its wrongful practices, work together with China in the same direction and resolve issues of mutual concern through equal dialogue and consultation," it said.

A.Ruegg--VB