A UK company that makes health sensors for next-generation Apple smartwatches has been blacklisted by its Chinese business partner for ties to the People’s Liberation Army. Rockley Photonics was forced to cancel the sale of its communications division to a Chinese joint venture it runs with cable maker Hengtong after the U.S. Department of Commerce added the Chinese company to its “entity list” in December. In December, Hengtong – who is also a major investor in Rockley – was added to the list “for acquiring and attempting to acquire items of American origin in support of the military modernization of…