Which Chinese companies that were on the list escaped this latest U.S. investment ban? Tencent’s WeChat and ByteDance’s TikTok, as well as Commercial Aircraft Corp. and Sinochem Corp.
President Joe Biden on Thursday (June 3) announced the consolidation and strengthening of a previous presidential executive order banning U.S. investments in the Chinese military-industrial complex, with a list of 59 Chinese military and surveillance technology companies on the first announced sanctions, effective Aug. 2.
Some commentators have suggested that the list is an olive branch to Beijing, and that Biden’s move, while offering Beijing concessions that would help stabilize relations, may not be enough to get the Chinese government to respond with concessions.
Biden basically followed the same line as under Trump
Biden issued a presidential executive order Thursday that essentially follows the same path as former President Trump’s Executive Order 13959 on “Addressing the Threat of Portfolio Investments from Funding Chinese Communist Military Companies.
“In essence, Biden is progressively laying out what Washington considers acceptable and unacceptable behavior, with particular emphasis on the unacceptability of the surveillance-military-industrial complex (of the Chinese Communist Party).” said Gao Canming, a senior Bloomberg correspondent.
In the executive order released Thursday, 59 CCP military and surveillance companies are listed on the China Military-Industrial Companies Blacklist (Non-SDN Chinese Military-Industrial Complex Companies List, or NS-CMIC for short).
Most of the companies on the list were previously announced under Trump, such as: companies in the CCP defense and related materials industries, as well as familiar surveillance and telecommunications companies, such as Hangzhou Hikvision Digital Technology Co.
The Biden administration has indicated that they will continue to update the list of Chinese entities as appropriate. The blacklist will instead be determined by the Secretary of the Treasury, who may consult with the Secretary of State; the Secretary of the Treasury may also consult with the Secretary of Defense if deemed necessary.
The Trump-era executive order requires that the blacklist be determined by the Secretary of Defense and that financial sanctions against companies involved in the Chinese Communist Party military and the targeting of companies be based on reports from the Department of Defense and authorized by Congress.
Which Chinese companies disappeared under Biden’s executive order
So who are the Chinese companies that did not appear on Thursday’s sanctions list? High-tech social media companies – Tencent’s WeChat and TikTok, the overseas app from Byte Jump Co.
Trump is concerned that these Chinese social media companies could leak data and allow the Chinese Communist Party to spy on them.
The two companies do not appear on Biden’s blacklist. The Biden administration also sought to withdraw a previous Trump ban on these apps, citing that they needed time to review Trump’s proposal.
Also excluded from the list are some previously identified companies, such as Commercial Aircraft Corporation of China Limited, which is seen as a future competitor to Boeing and Airbus, and two companies challenging the ban in court – Gowan Semiconductor Corp. and Wicker Basket Technologies Inc.
Sinochem, which was on the earlier list, was also removed.
Senior Reporter: Biden’s Executive Order May Give Chinese Companies a Chance to Get Off the Hook
This latest executive order amounts to a concession that looks to tighten the blacklisting criteria by focusing on the areas in which these companies operate – defense and surveillance – rather than on their ties to the Chinese Communist Party (CCP),” said Gao Canming, a senior reporter for Bloomberg, paraphrasing. not criminalized for their ties to the Chinese (Communist) military.”
“It may seem like a nuance, but it may give Chinese companies a clearer path to exoneration – for example, if they claim to be out of these industries or prove they never entered them in the first place.” He added.
From Beijing’s perspective, the Biden administration’s clarity and stability on its latest executive order actually seems more like handing Beijing a small olive branch.
Outsiders believe that Biden’s sanctioning of Chinese companies is releasing mixed messages to Beijing. On the one hand, the Biden administration issued a rare joint statement with Beijing on climate cooperation in April, and recently the two sides’ top trade representative officials spoke to each other twice in a week and pledged to continue communication in the future; on the other hand, the Biden administration continues to impose bans and blacklists on Chinese companies, as well as announcing sanctions against Chinese Communist Party officials involved in human rights violations.
Kurt Campbell, Biden’s top China adviser and head of Indo-Pacific affairs at the National Security Council, recently said publicly that the nearly half-century-long era of U.S.-China “engagement” has ended and has now officially entered an era of “intense competition. The era of “intense competition” has officially begun.
Reuters reported that Chinese investors were noncommittal about investing in the blacklist, and that most stocks of companies on the list, including those newly blacklisted, were up on Friday morning.
Wu Kan, a portfolio manager at Dongwu Securities Co. said he was not surprised by the new ban list and that listed companies belonging to important industries such as defense and semiconductors and backed by the Chinese Communist government were investment opportunities.