Share
November 12, 2020The US President, Donald Trump, has signed an executive order prohibiting American investors from investing in Chinese companies linked to Beijing's military activities.
This was announced by the White House.
The executive order prevents American corporations and individuals from owning shares directly or through funds that include any of the 31 companies identified by the United States as supporting the modernization of the People's Liberation Army.
The companies targeted, which include large state-owned aerospace, shipbuilding and construction companies, as well as technology companies such as Inspur Group, allow military access to advanced technology and expertise to help the People's Army expand and take a more aggressive stance around the world, US government officials say.
The Trump administration has always attempted to thwart Beijing's rise as a global competitor, economically, politically and militarily, and has repeatedly resorted to executive orders to limit its influence.
The order, which administration officials said has been under review for months, bans buying or investing in emerging market funds, which include corporations, as of January 11.
And it gives investors until November 2021 to disinvest in Chinese stocks.
Some of the companies concerned, the Wall Street Journal writes, are traded on Chinese stock exchanges, including Hong Kong, and their shares are sometimes bought by US investors as part of mutual funds.
Two of the companies, China Mobile Communications and China Telecommunications Corp., have branches that operate on US exchanges.
It is unclear how many Americans own these bonds or how many funds are at stake.