The Trump administration on Thursday (US standard time) unveiled an executive order prohibiting US investments in Chinese firms that Washington says are owned or controlled by the Chinese military, ramping up pressure on Beijing after the US election.
The order, which was first reported by Reuters, could impact some of China’s biggest companies, including telecoms firms China Telecom Corp Ltd, China Mobile Ltd and surveillance equipment maker Hikvision.
The move is designed to deter US investment firms, pension funds and others from buying shares of 31 Chinese companies that were designated by the Defense Department as backed by the Chinese military earlier this year.
Starting January 11, the order will prohibit purchases by US investors of the securities of those companies. Transactions made in order to divest ownership in the companies will be permitted until November 11, 2021.
“China is increasingly exploiting United States capital to resource and to enable the development and modernization of its military, intelligence, and other security apparatuses,” said the order released by the White House.
The Chinese embassy in Washington did not immediately respond to a request for comment.
White House trade adviser Peter Navarro estimated that at least half a trillion dollars in market capitalisation was represented by the Chinese companies and their subsidiaries.