Trump bans Americans from investing in 'Chinese military-linked' firms

Tuesday, 17 Nov, 2020

Tellingly perhaps, on the same day as Trump's executive order, Beijing congratulated President-Elect Joe Biden on his election victory.

The Chinese government's comments risk further inflaming relations between Beijing and Trump, who suggested during the campaign that China was hoping for a Biden win.

Trump's new orders on Thursday didn't have so much of an impact quickly.

“The Chinese Communist Party's exploitation of U.S. capital markets is a clear and ongoing risk to USA economic and national security and today's action by the Trump administration is a welcome start to protecting our markets and investors, ” Rubio said.

It is part of a growing effort by Congress and the administration to thwart Chinese companies that enjoy the backing of USA investors but do not comply with US rules.

The order applies to 31 Chinese companies which it says "enable the development and modernisation" of China's People's Liberation Army (PLA) and "directly threaten" U.S. security. It will take effect on January 11, 2021. Biden's Beijing squeeze National Security Advisor Robert O'Brien said the order would prevent Americans from unknowingly providing passive capital to Chinese companies- listed on exchanges around the world-that support the improvement of Beijing's army and spy agencies.

No surprise that Huawei is a no-go area for USA investors, but so too is China Mobile and China Telecom, which trade on the New York Stock Exchange. Since media called the presidential race six days ago, Trump has not conceded to President-elect Joe Biden, as is traditional once a victor is projected.

The order is Trump's first major policy move since the elections and it signals how much he wants to take advantage of the next few months to crack down on China.

Tensions over Taiwan have escalated dramatically since Republican Trump took office four years ago, with China mounting regular military drills near the island, including during visits earlier this year to Taipei by senior U.S. officials.

The US has taken tough decisions against China over various matters, including the coronavirus pandemic, freedom in Hong Kong and Taiwan, trade, and human rights abuse.

FILE - Paramilitary police officers march in formation near a poster of Chinese President Xi Jinping at the gate to the Forbidden City, in Beijing, China, May 22, 2020. "This is a guy who is a thug". But a key government body, the US General Services Administration, has stalled the transition process by not recognising Biden as the president-elect. "We express congratulations to Mr. Biden and Ms. Harris".

"China has told us and said publicly that the current issues are technical matters".