The Trump administration is preparing to designate four more Chinese companies as owned or controlled by the Chinese military in an effort to deter U.S. investors from investing in them, the sources said.
Reuters reported Nov. 20 that an unnamed U.S. official and a person with knowledge of the matter said the Defense Department would announce the new blacklisted Chinese companies as early as Friday (Nov. 20), and possibly next week.
If the Trump administration makes the announcement, it would bring the number of Chinese companies on the Defense Department’s blacklist of Chinese Communist military companies to 35.
The “Communist Chinese Military Companies” list was mandated by a 1999 law that required the Pentagon to compile a list of companies “owned or controlled” by the Communist Chinese military, and the Defense Department only began implementing it this year.
The Pentagon issued its first list on June 20, designating 20 Chinese and medium-sized companies as owned or controlled by the Chinese military, most of which are state-owned enterprises (SOEs) in fields such as aviation, communications, nuclear power, and shipping.
On August 28, the Pentagon designated an additional 11 Chinese companies as owned or controlled by the Chinese military, laying the groundwork for further sanctions.
U.S. President Donald Trump has signed an executive order on Nov. 12 prohibiting U.S. companies and individuals from investing in companies owned or controlled by the Chinese military as of Jan. 11 next year, and limiting the withdrawal of such investments to Nov. 11 next year.
The executive order is based on the International Emergency Economic Powers Act, the National Emergencies Act, and the United States Code, and is a declaration of a national emergency to address the threat from the Chinese Communist Party.
The Trump administration believes that U.S. investment in Chinese companies that support the development of the Chinese military will support the expansion of the Chinese Communist Party’s military.
The CCP has been pursuing a strategy of military-civilian integration and development that supports its military modernization goals by ensuring that the CCP military has access to advanced technologies and expertise acquired and developed by Chinese companies, universities, and research projects that appear to be civilian entities.
The U.S. government has also focused sanctions on Chinese companies that support the development of the Chinese military.
Republican Congressman Mike Gallagher said the move “helps ensure that no American unwittingly subsidizes the (Communist Party of China’s) campaign to dominate the technology of the future.
Gallagher has also introduced a bill that would ban Chinese companies on the Defense Department’s blacklist from investing in U.S. capital markets.
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