The Biden administration issued a new executive order on Thursday that bans U.S. entities from buying or selling publicly traded securities for 59 Chinese companies with alleged ties to defense or surveillance technology sectors, senior administration officials said.
The Treasury Department will enforce and update on a “rolling basis” the new ban list, which replaces one from the Department of Defense, the officials, noting the policy would take effect on Aug. 2. “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,” writes President Biden in the introduction to the order.
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The E.O. has its roots in the Trump administration’s long-running and evolving blacklist of Chinese companies, whether for government procurement, private investment by U.S. firms, or other purposes. Major tech companies like ZTE and Huawei were put on the list straight away in 2019, but others were steadily added over time. The Biden order refines these orders, revising certain portions and expanding others, particularly in the definition of what constitutes dangerous behavior or collaboration with Chinese authorities.
The new list of companies includes many of those listed over the last two years and adds plenty more. Seemingly any major company that deals with tech, communications or aerospace is at risk of being entered on the list, from China Mobile and China Unicom to China Aerospace, Hikvision and SMIC. Direct investment in the companies is disallowed, as is investing in an intermediary such as an index fund that includes one of the prohibited companies.
ARTICLE: PAUL MURDOCH
MANAGING EDITOR: CARSON CHOATE
PHOTO CREDITS: THE JAPAN TIMES