The US blacklist of Chinese companies remains a work in progress. President Donald Trump wants to block US investment in any Chinese company with military links. Definitions appear to be expanding. Reports that semiconductor and oil companies may soon join the list should not come as a surprise.

China’s state-controlled oil company China National Offshore Oil Corporation (Cnooc) has been heading for trouble for some time. Some of its operations in the South China Sea, far from Chinese borders, were already controversial with rivals. It is a crucial passageway for shipping lanes and a potentially large source of oil, expected to contain more than 10bn barrels.

The addition of Cnooc to the US blacklist would be immediately damaging. Cnooc relies on US technology and on partners such as ExxonMobil for oil discoveries and projects. Earnings are already suffering. As oil prices and sales fell in the first half, net profit at Cnooc fell by two-thirds. Restrictions would mean difficulty sourcing equipment and a possible sell-off by US investors. More than one-tenth of the shares of its Hong Kong-listed unit are held by US investors, which include Vanguard, Fidelity and JPMorgan Asset Management. Shares fell 14 per cent on Monday.