US President Joe Biden has expanded the list of Chinese companies banned from receiving US investments. The administration cites ties to the Chinese military and the sale of surveillance technology used against minorities and dissidents as primary reasons for the ban.
In an executive order signed on Thursday, Biden added 28 Chinese firms and subsidiaries to a Trump-era blacklist, bringing the total number of banned entities to 59. Under the new order, US investors are prohibited from buying or selling publicly traded securities from these companies.
The order rewrites a previous embargo implemented by former President Donald Trump to include companies that create and deploy surveillance technology, like the technology used against Muslim minorities in Xinjiang and dissidents in Hong Kong.
“President Biden also expanded the scope of this national emergency by finding that the use of Chinese surveillance technology to facilitate repression or serious human rights abuses, constitute unusual and extraordinary threats,” the press release reads.
Notably, one of China’s largest semiconductor manufacturers, Semiconductor Manufacturing International Corporation (SMIC), was classified under the list of Defense and Related Materiel Sector Companies of the PRC.
Other firms under this section include the China General Nuclear Power Corporation, China Mobile Limited and CoStar Group. The Aviation Industry Corporation of China and various of its subsidiaries were also listed.
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A White House official explained that the list aimed to ensure that “US persons are not financing the military industrial complex of the People’s Republic of China.”
The executive order will be enforced and updated “on a rolling basis” by the Treasury Department, which will replace the list from the Department of Defense (DoD). It will come into effect on August 2.
“The prohibitions are intentionally targeted and scoped to maximise the impact on the targets while minimising harm to global markets,” a White House official explained. The move signals that Biden plans to continue some of the same China-related policies previously put in place by the Trump administration.
“We fully expect that in the months ahead…we’ll be adding additional companies to the new executive order’s restrictions,” an official told Reuters.
Chinese Ministry of Foreign Affairs spokesman Wang Wenbin suggested that China would retaliate against the latest measures. “China will take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese enterprises and resolutely support Chinese enterprises in safeguarding the rights and interests in accordance with the law,” he said.
Several companies named on Biden’s list have previously dismissed claims that they were tied to the Chinese military. For example, smartphone brand Xiaomi successfully won a court case against the inclusion on the Trump-era list. Last month, the DoD agreed to lift the ban on the company.