A ban on investing by entities of the United States in dozens of Chinese companies that allegedly have ties with defense or surveillance technology sectors was imposed by the United States president Joe Biden as he signed an executive order which, according to a statement from the Biden administration expanded the scope of a Trump-era order that was legally flawed.
The new list of about 59 companies would be enforced and updated on a “rolling basis” by the US Treasury Department. The new executive order bans buying or selling publicly traded securities in the companies targeted on the list. The order also replaces the previous list by the Department of Defense, said senior administration officials to the media.
Biden said in the order that Chinese military-industrial complex, as well as military, intelligence, and security research and development programs cannot be invested in and supported by any US entities.
“In addition, I find that the use of Chinese surveillance technology outside the PRC and the development or use of Chinese surveillance technology to facilitate repression or serious human rights abuse constitute unusual and extraordinary threats,” Biden said, using the acronym for the People’s Republic of China.
Aviation Industry Corp of China (AVIC), China Mobile Communications Group, China National Offshore Oil Corp (CNOOC), Hangzhou Hikvision Digital Technology Co Ltd, Huawei Technologies Ltd (HWT.UL) and Semiconductor Manufacturing International Corp (SMIC) are among the major companies that were listed in the previous Defense Department list which were also placed in the latest list,
China’s push to boost its domestic chip sector is critically dependent on SMIC.
“We fully expect that in the months ahead … we’ll be adding additional companies to the new executive order’s restrictions,” one of the senior officials said. The scope of the Trump administration’s initial order last year was expanded by the inclusion of Chinese surveillance technology companies, said a second official to reporters. According to the White House, the previous order by the Trump administration was carelessly drafted which made it vulnerable to being challenged in court.
A number of aspects of US policy toward China are being reviewed by the Biden administration and has extended the deadline for the implementation sate as set by the former President Donald Trump’s order while a new policy framework was crafted by the current Biden administration.
Biden has taken a number of steps for countering China which includes the reinforcement of US alliances and focusing on large domestic investments for boosting economic competitiveness of the US even while the relations with the second largest economy of the world have soured increasingly.
Guidance on what the scope of surveillance technology means will be provided later on by the Treasury Department, said senior officials, which would include considering whether companies are facilitating “repression or serious human rights abuses.”
“We really want to make sure that any future prohibitions are on legally solid ground. So, our first listings really reflect that,” a second senior administration official said.
(Adapted from Reuters.com)