Defiant Trump Clamps Down On Firms With Chinese Military Connections

An Executive Order from outgoing United States President Donald Trump has banned US investment in Chinese companies which it says have connections with the Chinese military.

Investment Block

The move, which cites 31 companies listed by the Pentagon earlier in 2020, prevents pension funds, investors and US businesses from investing in these Chinese organisations.

It’s the latest stage in President Trump’s escalating trade squabble with China and has inevitably increased tensions between the US and the Chinese government in Beijing.

The order focuses on claims that investment in Chinese firms is effectively being used to bolster Chinese security interests, stating that:

“China is increasingly exploiting United States capital to resource and to enable the development and modernisation of its military, intelligence, and other security apparatuses.”

The upshot is that, from 11 January, US financial interests will be banned from investing in securities that are traded by the listed companies in markets outside mainland China and where those markets are open to US investors.

Most of the blacklisted firms have no directly traded shares in US markets.

High Profile Targets

Two of the most high-profile Chinese companies affected by the presidential Executive Order from Donald Trump are mobile and telecoms technology firm Huawei and surveillance equipment maker Hikvision.

Both companies deny any links to, or involvement with, the Chinese military, and both are already facing other sanctions on their American business activities, such as export bans on their products.

Trade adviser in the White House, Peter Navarro, said the aim of the move was to “choke off American capital to China’s militarisation”.

Chinese Response

For its part, the Chinese government responded by saying that the US government was operating in breach of conventional market rules and was “wantonly suppressing Chinese companies under the pretext of national security”.

A spokesman for the Chinese foreign ministry, Wang Wenbin, said in a statement:

“The US government maliciously slandered China’s military-civilian integration development policy out of political motives and abused national power to unreasonably suppress Chinese companies.

“This move will not only seriously damage the legitimate rights and interests of Chinese companies, but will also damage the interests of investors from all countries, including the United States.“