The Impact of US Export Controls on the Capacity Utilisation of Chinese Enterprises: An Empirical Study Based on the Entity List

The US Entity List policy, by severing access to critical intermediate inputs and technology transfers for specific Chinese enterprises, potentially exacerbates supply ‐ demand imbalance. Using panel data of Chinese listed enterprises from 2010 to 2023, this paper treats the imposition of Entity List sanctions on enterprises as a quasi‐natural experiment, with the aim of assessing the causal impact of these sanctions on enterprise capacity utilisation (CU). The empirical results indicate that: (1) The Entity List has led to a significant decline in the CU of Chinese enterprises; (2) The Entity List suppresses CU primarily by deteriorating enterprise performance and tightening financing constraints; (3) University‐industry collaboration and government subsidies serve as effective mitigating factors, significantly alleviating the negative impact of the Entity List on CU; (4) Heterogeneity analysis demonstrates that the negative impact is more pronounced for enterprises characterised by higher asset depreciation rates, weaker market competitiveness, greater centralised supplier concentration and those not deploying within the Belt and Road countries. These findings demonstrate that the US Entity List has driven China's structural contradictions to spread into high‐tech industries, no longer confined solely to traditional sectors such as steel and cement. Simultaneously, the results highlight the critical role of knowledge spillovers from domestic universities and strategic government support in helping enterprises withstand shocks like supply disruptions.