Washington will ban 59 Chinese companies from American investors

The Biden administration has banned Americans from investing in dozens of Chinese defense-controlled technology companies in a bid to stem China’s use of US capital to undermine national security.

President Biden on Thursday signed an executive order banning investment in 59 companies, including Chinese groups such as Huawei, a telecommunications equipment maker, and Semiconductor Manufacturing International Corporation, China’s largest manufacturer, which U.S. intelligence says is based on US intelligence. very important for the Chinese army.

Top US officials say the ban will take effect on August 2. But investors can trade in the next 12 months to sell their shares. Although Americans are not required to sell securities, they will not be able to sell their property after one year.

The Enforcement Order prohibits direct investment in both debt and equity securities, but it also prohibits Americans from investing in assets that contain Chinese securities in their portfolios.

“The new executive order means that the administration intends to maintain its reliance on Chinese defense companies to ensure that US individuals do not fund the People’s Republic of China’s military-industrial complex,” said a senior US official. “The bans are aimed at maximizing the impact on targets while minimizing damage to world markets.”

The ban means the Biden administration’s latest efforts to make more and more efforts hawk position Everything from China to Uyghur oppression to its aggressive military activity in the South East China Sea. It comes as Biden prepares to travel to Europe to attend the G7 summit, where China will be the topic of discussion.

Former President Donald Trump released it late last year order: banning investments in companies that the Pentagon has listed as having links to the People’s Liberation Army. But the move caused confusion in the financial markets, as there was little evidence of its implementation. U.S. courts later ruled that the government had in some cases failed to provide sufficient evidence to substantiate any company on the target list.

Senior officials say Biden’s order will ensure that the investment ban is based on a stronger legal basis. They added that it would expand Trump’s order to include control companies, including Hikvision, which are accused of helping Beijing pursue more than 1 million Muslim Uyghurs held in detention camps in northwest Xinjiang.

The target companies are China Aviation Industry Corporation, China National Offshore Oil Corporation, China Railway Construction Corporation, and China National Nuclear Corporation. The list includes three major Chinese telecommunications companies: China Mobile, China Telecom and China Unicom.

“At first glance, this is a rather strange list of Chinese corporate names. “The pace of sanctions imposed on capital markets by the previous administration seems to be sustained,” said Roger Robinson, a former chairman of the US-China Congressional Economic and Security Review Committee, which chairs the RWR Advisory Group.

The Pentagon is expected to release an updated version on Thursday List of Chinese companies With PLA links, after Congress demanded that the Department of Defense submit a new list each year. But a senior official said the Pentagon’s list would not be affected by the ban, set out in a new executive order.

The official said the Pentagon’s list would give it “flexibility to broad stakeholders about companies that have a wide range of connections with different parts of the Chinese government.”

The latest directive will provide clarity to investors, stock exchanges and index suppliers who have been embroiled in a skirmish between Chinese hawks over the past year under the Trump administration’s Treasury Department.

In December և January, index suppliers cleared Chinese-linked stocks from their indexes. And in the first few days of 2021, the New York Stock Exchange announced that it would abandon the shares of China Mobile, China Telecom and China Unicom listed in the United States before briefly changing the decision.

Exchange: was eventually removed The three companies came under pressure from the Trump administration, including then-Treasury Secretary Steven Mnuchin. Financial platforms like Bloomberg are now clearly warning US investors when they can trade in securities subject to sanctions.

Additional report by Eric Platt in New York

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