Trump Bans US Investment In Chinese Firms That Help Military

Monday, 16 Nov, 2020

The executive order is aimed at prohibiting USA investments in Chinese firms that are determined to be owned or controlled by the country's military.

Other Trump options may include subjecting more Chinese state-owned companies to sanctions, expanding restrictions on "dual-use" civilian-military exports, banning more Chinese apps after its TikTok and WeChat campaigns and blocking all semiconductor sales to Huawei Technologies beyond those for 5G networks.

The order goes into effect from January 11. China Telecom dropped 4.8%.

A Joe Biden presidency promises a return to the kind of liberal internationalism that has been the mark of USA foreign policy for decades - which some in Taiwan worry will mean going soft on China.

"Starting January 11, the order would prohibit any transaction by USA persons in securities of 31 Chinese companies that were designated by the Defense Department as backed by the Chinese military earlier this year".

"The People's Republic of China (PRC) is increasingly exploiting United States capital to resource and to enable the development and modernization of its military, intelligence, and other security apparatuses", the order read.

“The Chinese Communist Party's exploitation of U.S. capital markets is a clear and ongoing risk to United States economic and national security and today's action by the Trump administration is a welcome start to protecting our markets and investors, ” Rubio said. This includes pension funds or owning any shares in blacklisted Chinese companies. Investors who now hold shares in the designated companies would have until November 2021 to divest them.

"Trump started the trade war with China, imposed tariffs on Chinese-made products and we as Hong Kongers see the enemies of our enemies as our allies", said one 27-year-old democracy advocate who gave only his first name, David.

The Chinese embassy in Washington did not immediately respond to a request for comment.

The comments come 10 days after the elections and nearly a week after Biden was declared the victor, a result which Trump is contesting.

Ahead of the United States election, a YouGov poll of 12 Asian countries and territories, found that only in Taiwan did a majority of respondents say they wanted Trump to win.

The Trump administration received months of warnings from its security and economic teams regarding measures on Chinese military ambitions.

"Many people in Taiwan are anxious about Biden's victory because Trump did offer Taiwan many friendly arms sales and favorable bills", said Simon Chang, a political science professor at National Taiwan University.

According to Peter Navarro, White House trade adviser, there are at least half a trillion dollars in market capitalization from Chinese companies and their subsidiaries. "In diplomatic circles here, one message has been clear - that is that the American "China containment" stance is bipartisan", Mo said. The Department of Defense has identified 31 such enterprises.