US President Donald Trump has signed an order strengthening a ban on US investments in companies with ties to the Chinese military, the White House said on Wednesday, curbing Chinese access to US capital markets days before he leaves office.
Under the amended directive, which was first issued on Nov. 11 last year, US investors would be required to have completely divested their holdings of securities of companies designated by the US Department of Defense as owned or controlled by the Chinese military.
The change expands the scope of the directive, which initially only restricted US investors from buying those securities from that date.
Photo: Bloomberg
“Today’s executive order ensures that the United States retains a key tool to protect US investors from funding Chinese military modernization,” a senior administration official said.
The executive order is part of Trump’s bid to cement his tough-on-China legacy in the waning days of his presidency. It also sought to give teeth to a 1999 law that tasked the defense department with drafting a list of Chinese companies it believes are owned or controlled by the Chinese military.
Among the 35 companies that the department has so far blacklisted are China’s top chipmaker Semiconductor Manufacturing International Corp (中芯國際) and oil giant CNOOC Ltd (中國海洋石油).
Reuters and other outlets earlier on Wednesday reported that the Trump administration had scrapped plans to blacklist tech giants Alibaba Group Holding Ltd (阿里巴巴), Baidu Inc (百度) and Tencent Holdings Ltd (騰訊).
US officials had weighed whether to include the three companies on the trading blacklist due to alleged ties to the Chinese military, but decided against the move, the Wall Street Journal reported.
Alibaba and Baidu trade on the NASDAQ, while Tencent is listed in Hong Kong, where Alibaba also has a secondary listing.
Senior US officials disagreed about whether to ban the three firms from US portfolios, with US Secretary of the Treasury Steven Mnuchin ultimately prevailing in a dispute with US Secretary of State Mike Pompeo, it reported.
The Chinese embassy in Washington did not immediately respond to a request for comment.
Separately, S&P Dow Jones Indices LLC said it would remove oil giant CNOOC securities before Feb.1 due to the US sanctions.
Additional reporting by AFP
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