WASHINGTON—President Joe Biden signed an executive order on June 3, amending a Trump-era ban that prohibits U.S. investors from investing in Chinese military companies. The new order expands the previous prohibition list by adding more Chinese defense and surveillance technology firms.
The order also moves the authority of selecting targeted companies to the Treasury Department from the Defense Department.
Biden’s order expands the scope of the national emergency declared by then-President Donald Trump last year and bans more companies involved in “the development or use of Chinese surveillance technology to facilitate repression or serious human rights abuse.”
The order “prohibits United States persons from engaging in the purchase or sale of any publicly traded securities” of 59 entities listed in the annex of the executive order.
Blacklisted companies include telecoms equipment maker Huawei, video surveillance manufacturer Hikvision, aerospace firm Aviation Industry Corp. of China, and state-run mobile operators China Mobile and China Telecom.
The Treasury Department will continue to update the list of these Chinese entities. The selection will be determined by the Treasury secretary in consultation with the secretary of state and, if deemed appropriate, the Defense secretary, according to a White House factsheet.
The ban list doesn’t mention subsidiaries of these companies as the list is “intentionally targeted and scoped,” according to the factsheet.
The Trump administration targeted 44 Chinese military companies and intended to include publicly traded subsidiaries that were “50 percent or more owned” or “determined to be controlled” by those companies.
The new order, however, shrinks the scope of the ban by excluding subsidiaries.
The investment prohibitions will take effect on Aug. 2, but investors are permitted to make trades to divest their holding until June 3, 2022.
Sen. Marco Rubio (R-Fla.) raised concerns about Biden’s move to shift the authority to the Treasury Department.
BY EMEL AKAN