President Trump signed the latest executive order on Jan. 13 to further curb the Chinese Communist Party’s access to the U.S. investment market.
President Trump (Trump) signed the latest executive order on January 13, “cutting across the board” to the Chinese Communist Party’s military companies. The executive order prohibits U.S. investors from holding securities in Chinese companies owned or controlled by the Chinese Communist Party’s military after Nov. 11, 2021.
On Jan. 13, the White House issued a news release stating that President Trump has signed an executive order amending Executive Order 13959 issued last November to address the threat posed by investments in securities that fund Chinese Communist military companies.
The new executive order states that after November 11, 2021, U.S. investors may no longer hold securities of Chinese companies that are determined to be owned or controlled by the Chinese Communist Party military.
The new executive order further expands the scope of the November executive order, which previously only provided that U.S. investors may not purchase those securities through Nov. 11, 2021.
A senior U.S. government official told Reuters, “Today’s executive order ensures that the United States retains a key tool to protect U.S. investors from funding China’s (Communist Party of China’s) military modernization.”
The Trump administration believes that Americans investing in Chinese companies with a Communist Party military background could pose a threat to the United States by contributing to the expansion of the Communist Party’s military.
The new executive order provides greater clarity on the executive authority of the U.S. Treasury Department and the Department of Defense. The Secretary of Defense, in consultation with the Secretary of the Treasury, may “blacklist” Chinese companies that meet the criteria to be sanctioned, regardless of whether the Secretary of Defense provides a report, until the Secretary of Defense removes the company from the list.
Chinese companies designated by the Secretary of the Treasury will also need to be removed from the blacklist by the Secretary of the Treasury before sanctions can be ended.
In addition, the new Executive Order further strengthens a 1999 law that authorizes the Department of Defense to draw up a list of Chinese companies that it believes are owned or controlled by the Communist Party’s military.
There are currently 35 Chinese companies that have been blacklisted by the U.S. Department of Defense, including China’s largest chipmaker Semiconductor Manufacturing International (SMIC) and oil giant CNOOC.
On Jan. 5, Trump also signed an executive order to ban eight Chinese software applications, including Alipay and Tencent qq, before the end of his first term.
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