US President Joe Biden has expanded a previously introduced ban on American investments in Chinese companies deemed by the US government to have links with the People's Liberation Army (PLA).
In an executive order (EO) issued by the White House on 3 June, Biden banned US investments in 59 Chinese firms, extending the scope of the prohibition to include Chinese companies involved in developing surveillance technologies.
The ban was originally introduced by the Trump administration in November 2020 under EO 13959. The ban initially featured a list of about 30 firms but was subsequently extended to more than 40.
The White House said of the new Biden directive, “This EO allows the United States to prohibit – in a targeted and scoped manner – US investments in Chinese companies that undermine the security or democratic values of the United States and our allies.”
It added, “This EO will amend EO 13959 by creating a sustainable and strengthened framework for imposing prohibitions on investments in Chinese defence and surveillance technology firms.”
The new ban takes effect in early August and applies to US investments in the publicly traded securities of the designated Chinese entities. Such entities are defined by the EO as those that operate in China's defence or surveillance-technology sectors or those that are owned or controlled, directly or indirectly, by the PLA.
The White House said, “This EO signals that the administration will not hesitate to prevent US capital from flowing into [China's] defence and related materiel sector, including companies that support [China's] military, intelligence, and other security research and development programs; or into Chinese companies that develop or use Chinese surveillance technology to facilitate repression or serious human rights abuse.”
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