Infotech

White House bans Americans from investing in Chinese “military-industrial” complex



Posted on Nov 13, 2020 at 6:25 amUpdated Nov 13, 2020 at 6:28 am

The subject had been on the table for several months. On Thursday, the White House issued an executive order prohibiting Americans from investing, directly or through funds, in some 30 Chinese companies deemed close to the military sector. This ban will take effect on January 11, nine days before the planned inauguration of the new president-elect Joe Biden – whose victory Donald Trump refuses to recognize. Holders will have until November 11, 2021 to clear their securities.

China “Increases the size of its military-industrial complex by forcing Chinese civilian companies to support its military and intelligence activities”, explains Donald Trump in the decree transmitted by the White House. “These companies, although they remain ostensibly private and civilian, directly support the military, intelligence and security apparatuses” from China, he justifies.

China Mobile and China Telecom

The companies concerned are listed in China and Hong Kong, or even, for some subsidiaries, on Wall Street. According to the list published in June by the “Financial Times”, the telecoms groups Huawei, China Mobile and China Telecom are concerned, as are the nuclear groups CNNC and CGN, the aeronautical group Avic or the defense company Norinco, but also companies in the construction or maritime transport sector. Many of these companies are already subject to various types of US restrictions.

Individuals do not always know themselves in which companies their money is invested. “Individual investors in the United States may unknowingly provide funds through passive institutional investment vehicles such as mutual funds and retirement plans.”National Security Advisor Robert O’Brien said in a separate statement, also released Thursday.

“Involuntary supply”

“The president’s action serves to protect US investors against the unintentional provision of capital to strengthen the capabilities of the People’s Liberation Army and the intelligence services of the People’s Republic of China.”, he supports. Services which, Washington believes, “Routinely target US citizens and businesses through cyber operations and directly threaten critical infrastructure, the economy and the military of the United States and its allies”.

This measure complements the arsenal of announcements and actions taken against Beijing by the Trump administration in recent years. On Thursday, the Commerce Department, on the other hand, indicated that the soap opera of the ban on the TikTok video platform, owned by the Chinese group ByteDance, would still continue, “Pending new legal developments”.

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