Joe Biden expands investment ban on blacklisted Chinese tech companies
US President Joe Biden has expanded a ban that prohibits Americans from investing in Chinese companies that the administration says have ties to the Chinese military or sell surveillance technology used against religious minorities and dissidents.
In an executive order on Thursday, Biden added nearly a dozen Chinese firms and their subsidiaries, including China General Nuclear Power Corp and plastic pipe maker Aerosun Corp, to the list, bringing the total of blacklisted companies to 59.
Under the order, investors can no longer buy new securities in these companies on American markets starting on August 2; Americans with current investments in the firms will have a year to divest.
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Thursday's announcement is another sign that Biden is continuing the hardline approach to China taken by his predecessor Donald Trump. While the administration is reviewing many of Trump's China policies, it has not revoked much existing legislation or many orders - including tariffs levied on hundreds of billions of dollars in Chinese imports.
The White House said on Thursday the order aims to "further address the ongoing national emergency" signed by former President Trump in November with respect to "the threat posed by the military-industrial complex of the People's Republic of China (PRC)."
The order also expanded the scope of prohibited investments to include surveillance technology firms, saying that the use of such technology by China in and out of the country "facilitate repression or serious human rights abuse constitute unusual and extraordinary threats".
Chinese foreign ministry spokesman Wang Wenbin, asked about the potential change earlier on Thursday, said that "the move severely disrupted normal market rules and order".
"It not only undermined the lawful rights and interests of Chinese companies but also hurt the interests of global investors, including those in the US," Wang said.
He called on the US to "correct its mistakes, and stop actions that undermine the global financial market order", adding that "China will take necessary measures to firmly safeguard Chinese enterprises' legitimate and lawful rights and interests".
Last month, the Coalition for a Prosperous America, a bipartisan advocacy group for American manufacturing and agricultural interests, urged the Biden administration to expand on the policies of the Trump administration and make sure that US capital markets were not accessible for "companies that support the [Chinese Communist Party] military-civil fusion strategy".
Trump signed the previous executive order in November. As many as 48 Chinese firms including technology giant Huawei and video surveillance manufacturer Hikvision were blacklisted by the US Defence Department.
A number of Chinese companies filed lawsuits shortly after Biden took office. Three telecommunications carriers - China Mobile, China Telecom, and China Unicom - asked the New York Stock Exchange to reconsider its decision to delist their American Depository Receipts (ADR) in response to the Trump order. The exchange delisted the three last month.
Xiaomi and Luokung Technology, on the other hand, both won court battles to be exempted from sanctions. Xiaomi, an electronics maker, was removed from the Defence Department's blacklist, while the case of Luokung, a data processing firm, is pending.
This article originally appeared on the South China Morning Post (SCMP).
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