US President Joe Biden on Thursday signed an order to amend a ban on US investment in Chinese companies begun under former US president Donald Trump, naming 59 firms with ties to China’s military or in the surveillance industry, including Huawei Technologies Co (華為) and the country’s three biggest telecommunications firms.
The ban on new investments is to take effect on Aug. 2 at 12:01am in New York, said administration officials, who briefed reporters on condition of anonymity.
Investors will have one year to fully divest, the officials said.
Biden’s order is largely a continuation of a policy issued by Trump. Biden’s position on Trump’s order has been closely watched by Wall Street and Capitol Hill, where lawmakers have called for a strong stance against China over issues ranging from trade to human rights.
Many of the companies in Biden’s order were already on the Trump administration’s list, including the nation’s largest telecoms — China Mobile Communications Group Co (中國移動), China Unicom Ltd (中國聯通) and China Telecommunications Corp (中國電信) — as well as top chipmaker Semiconductor Manufacturing International Corp (SMIC, 中芯) and server maker Inspur (浪潮).
Among the defense companies on Biden’s list are Aviation Industry Corp of China (中國航空工業), which is one of the best known of the Chinese military giants; China North Industries Group Corp (中國北方工業集團); China Aerospace Science and Industry Corp (中國航天科工集團); and China Shipbuilding Industry Co (中國船舶重工集團公司).
Biden’s list also includes Hangzhou Hikvision Digital Technology Co (杭州海康威視數字技術), a developer of surveillance cameras and facial-recognition technology that has helped Chinese authorities roll out “safe city” initiatives in Xinjiang, where ethnic Uighurs have allegedly faced persecution.
Companies on Biden’s list that were not covered in Trump’s initial ban include Zhonghang Electronic Measuring Instruments Co (中航電測儀器) and Jiangxi Hongdu Aviation Industry Co (洪都航空工業集團).
Shares in the targeted firms were a mixed bag yesterday morning in Asia. Hangzhou Hikvision was little changed after sliding about 2.2 percent, while SMIC fell as much as 3.3 percent in Hong Kong.
The US Department of the Treasury released guidance on the penalties later on Thursday.
The department is to update the list on a rolling basis, one of the officials said.
A Hangzhou Hikvision spokesperson said in a statement that “with no justification for previous lists, the US government keeps finding creative ways to continue targeting Hikvision simply because we happen to be headquartered in China.”
Under Biden’s order, the investment prohibitions will apply to subsidiaries of companies only if they are listed by the department’s Office of Foreign Assets Control.
The amended order clarifies that the measures will no longer apply to companies whose names closely match the listed entities, the Biden administration officials said.
The assets office’s list will be coordinated with the US departments of state and defense. The Pentagon, which is required by the US Congress to keep a list of companies linked to the Chinese military, released its list on Thursday.
Some companies will be listed by the Pentagon and the assets office, the officials said.
The amendment to Trump’s order comes after two Chinese companies successfully challenged it in US court.
Biden’s team said that a revision was necessary to ensure it was legally sound and sustainable in the long-term.
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