Thursday, June 3, U.S. President Joe Biden signed an order prohibiting U.S. businesses and individuals to invest in Chinese companies that Washington considers undermine the security of the United States. The blacklist includes 59 PRC firms, according to the White House website.
“This executive order allows the United States to prohibit investments in Chinese companies that undermine the security or democratic values of the United States and our allies,” the document said.
Among the companies banned are global telecommunications leader Huawei Technologies Co., Ltd, aircraft manufacturer Aviation Industry Corporation of China (AVIC), China Railway Construction Corporation (CRCC), microelectronics company Semiconductor Manufacturing International Corporation (SMIC) and others.
The decree comes into force on August 2, 2021.
It is noted that after the start of the ban, U.S. citizens will not be allowed to participate in the sale or purchase of any securities traded on the stock exchange.
According to the White House, this executive order will prevent U.S. investments from supporting the Chinese defense sector. It would also allow the U.S. government to respond to threats from Chinese companies in the surveillance technology sector. The U.S. administration believes that China is using them to conduct surveillance at home and abroad on ethnic minorities, and that these technologies “contribute to repression and serious human rights abuses.”
The White House specifies that the executive order is intended to help “further respond to the November 12, 2020 emergency declaration regarding the threat posed by the PRC’s military industrial complex.”
The executive order is a continuation of measures taken under former U.S. President Donald Trump. Thus, under Trump’s January 2021 executive order, U.S. investors are prohibited from buying and selling securities of Chinese firms that Washington considers affiliated with the People’s Liberation Army of China. The list of these companies is compiled by the U.S. Secretary of Defense.