The new decree signed by President Joe Biden is part of a series of measures designed to counter China.
Joe Biden has extended the list of restrictions on Chinese investments in order to broaden the scope of the measures taken under the former presidency of Donald Trump.
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US President Joe Biden on Thursday signed a new decree that aims to ban investments in 59 Chinese companies with suspected links to the defense or surveillance technology sectors. According to the US administration, this initiative broadens the scope of a previous decree dating from Donald Trump’s presidency.
The Chinese government protested the plans even before the announcement. Foreign Office spokesman Wang Wenbin said the US is ignoring the facts and should “correct its mistakes and stop harming financial markets and the interests of investors.”
The US President’s move builds on an order made by Biden’s predecessor Donald Trump in November, which resulted in more than 40 companies with alleged military connections being added to the list. Biden’s order also affects companies accused by the US of using surveillance technology to contribute to human rights abuses.
“The use of Chinese surveillance technologies outside of China (…) or the use of Chinese surveillance technologies to undermine human rights are unusual threats,” said the official statement.
The US Treasury Department will apply and update this new blacklist “on an ongoing basis , senior officials in the Biden administration have said. This list will replace the Defense Department document that is currently being used as a reference and will come into force on August 2, they said.
The measure is “in line with the commitment of the Biden government to protect the central national security interests of the United States and the democratic values”. Unlike was the case the Trump’s regulation, the Ministry of Finance rather than Defense now takes responsibility.
The objective is not only to prevent support by American investments to the Chinese military-industrial complex, but also military intelligence as well as research and development programs in the security sector, explains Joe Biden in the decree.
“The use of Chinese surveillance technologies outside of China (…) or the use of Chinese surveillance technologies to obstruct human rights constitute unusual threats,” said the president.
An Unending List
Large Chinese companies that appeared in the previous version of the Treasury Department’s blacklist are included in this new list. Among them, the aeronautical group Aviation Industry Corp of China (AVIC) , the telecoms operator China Mobile Communications Group, and the country’s third-largest state-owned oil company China National Offshore Oil Corp (CNOOC) .
CCTV manufacturer Hangzhou Hikvision Digital Technology, telecoms equipment maker, Huawei Technologies and semiconductor maker Semiconductor Manufacturing International Corp (SMIC), all crucial to supporting the Chinese chip industry, have also been included in this blacklist.
Some earlier inclusions were however exempted, with an example being Chinese smartphone provider, Xiaomi, which was removed from the list in a court in Washington.
The new decree is part of a series of measures aimed at countering China.
By including Chinese companies in the surveillance technology sector in this document, the new decree expands the scope of the old measures, officials said.
“We fully expect that, in the coming months, (…) additional companies will be added to the restrictions provided for by the new decree.”
More Latitude for Investors
Against the backdrop of strained relations between the two powers, Joe Biden is re-examining Washington’s policy towards Beijing on a number of aspects. The new decree is part of a series of measures intended to counter China, in particular by strengthening alliances with the United States and by investing to make the American economy more competitive.
A Biden administration official said that the Treasury Department guidance will check if Chinese companies facilitate “crackdown or serious human rights violations” in China or abroad. However, investors will have time to “undo” their investments, another representative said.
A War Transcending Incumbents
The Republican, Donald Trump, started a trade war with China three years ago, which escalated with mutual punitive tariffs and continues to this day. His government also took action against various Chinese companies.
After taking office in January, Democrat Biden announced a review of China’s policy, but already let it be known that he, too, wanted to pursue a tough course.