On Thursday, President Donald Trump issued an order prohibiting Americans from investing in Chinese military-linked firms. According to reports, the companies that the US identifies being Chinese Military-controlled or owned won’t be getting any more investment from American investors.
This is Trump’s first big decision after Democrat Joe Biden defeated him in the US Presidential Elections. As per the source, economists and political analysts have said that even if Trump had lost the elections, he would still take measurable actions against China before leaving office on January 20.
Analysts also assume that Biden would also continue to take action against China. This is due to the already mounting tension between the two countries. Furthermore, there are also vexation with China’s trade and human rights records. Analysts have also cited the accusations of spying and technology theft as the reason there won’t be much change in the US-China relations.
US Officials have made numerous complaints against China’s ruling Communist Party. They have said that the Communist Party is benefiting from their access to American technology and investment. They are using the American resources to scale up their military, according to analysts. The Chinese Military is already one of the strongest and heavily-armed forces in the world.
Pentagon has listed 31 companies with links to Chinese Military
The orders on Thursday suggest that the listed companies are in direct support of the Chinese Military, Intelligence, and Security networks. The order said that “Beijing exploits United States investors” to fund Military Development. According to the issued order, the companies do that by selling securities in American and Foreign financial markets.
The Pentagon has listed 31 companies earlier today. They say that the Chinese military is owning or controlling these companies. These include Military contractors or state-owned companies including phone carrier China Telecom Ltd. Although, the list also includes Huawei Technologies Ltd. And Hikvision Digital Technology Co. Huawei and Hikvision have said that they are private and deny any links to the military.
Most of the listed companies have traded no shares in the US. However, a number of them sell stocks, bonds, and other securities in foreign markets other than China. These are quite accessible to American investors.
Trump’s order will forbid American investors from performing any kind of transactions in any of the listed Chinese companies as being linked to the Communist Party’s military wing, People’s Liberation Front. The order won’t allow investors to conduct any transactions in publicly traded securities that are issued by the listed Chinese companies.
According to reports, they will allow to make sales to strip the listed companies’ securities from November 11, 2021.
Trump’s new orders on Thursday didn’t have so much of an impact quickly. But it could mean that some companies will face mounting pressure on them soon. These include telecom giant Huawei and Hikvision, the video surveillance provider. Reports say that Hikvision is already battling US export bans and other sanctions.