US President Donald Trump signed an order barring US investments in Chinese firms owned or controlled by the military, the latest White House bid to pressure Beijing over what it views as abusive business practices.
China is “increasingly exploiting” US capital for “the development and modernization of its military, intelligence and other security apparatuses,” posing a threat to the US, according to the executive order signed on Thursday.
The order prohibits investment firms and pension funds from buying and selling shares of 20 Chinese companies designated in June by the Pentagon as having military ties, as well as 11 companies added in August.
Photo: EPA-EFE
The Chinese Ministry of Foreign Affairs yesterday accused the US of “viciously slandering” its military-civilian integration policies and vowed to protect the country’s companies.
“This not only severely harms the legitimate rights and interests of Chinese companies, but also the interests of foreign investors including US ones,” Chinese Ministry of Foreign Affairs spokesman Wang Wenbin (汪文斌) told a regular news briefing, urging the order’s withdrawal.
Relations between the US and China are expected to remain rocky despite Trump’s defeat to Democrat and former US vice president Joe Biden in the presidential election last week.
The Trump administration has continued to follow through on vows to punish Beijing over the COVID-19 pandemic, its treatment of Uighurs and the crackdown on dissent in Hong Kong.
China also officially extended congratulations to Biden on his election victory.
Beijing had been one of the last holdouts as Trump mounted an unlikely battle to contest the results.
Shares of top Chinese firms, including China Mobile (中國移動) and China Telecom (中國電信), tumbled.
China Mobile, whose controlling shareholder China Mobile Communications Group (中國移動通信集團) is on the list, dropped 5 percent in Hong Kong, the biggest intraday loss in almost eight months.
China Telecom slumped 7.8 percent, its biggest drop in 12 years.
Chinese officials have threatened to respond to previous Trump administration actions with their own blacklist of US companies.
Liu Dongshu (劉冬舒), an associate professor of Chinese politics at the City University of Hong Kong, said that Beijing would likely shrug off such “symbolic” provocations while it waits to see what kind of policy the Biden administration would put into place.
“For those who are clearly owned by the military, they don’t have a lot to do with the US,” Liu said. “China is waiting for Trump to step down. It will avoid being too sensitive — be calm and don’t overreact — to any of Trump’s actions towards China as his term winds down.”
The latest prohibition is to go into effect on Jan. 11, and allows US investment firms and pension funds to divest their holdings in companies linked to the Chinese military over the next year.
If the US determines additional companies have military ties, US investors would be given 60 days from that determination to divest.
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