The U.S. Treasury Department has revised its restrictive measures regarding investments in certain Chinese companies with military backgrounds and their subsidiaries, extending the effective date of the ban until late May.
A statement released by the Treasury Department’s Office of Foreign Assets Control and published on the Treasury Department’s website Wednesday (Jan. 27) said the Biden administration said most investment projects by U.S. investors in listed Chinese military firms with similar but not identical names would be approved until May 27.
The ban, however, will not allow U.S. investors to engage in securities trading activities in Chinese military companies and their subsidiaries that are on the sanctions list.
The previous U.S. President Donald Trump issued an executive order on Nov. 12 of last year announcing a ban on U.S. investment in Chinese companies identified by Washington as being owned or controlled by the Chinese military, beginning Jan. 11 of this year.
The executive order states that these companies, which have ties to the Chinese military and intelligence agencies, are listed on the U.S. stock market to raise funds for the development and modernization of the Chinese military, posing a threat to U.S. Security.
The executive order also prohibits U.S. investors from purchasing the securities of such Chinese companies. The purpose of this approach is thought to be to exert influence over some of China’s largest companies, such as CNOOC, China Mobile, China Telecom and China Unicom. Some of these companies claim they have no ties to the Chinese military.
Beijing accuses the U.S. government of having no relevant evidence and sees the ban as an arbitrary crackdown on Chinese companies.
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