Biden administration bars U.S. investors from 59 Chinese companies

The Biden administration is expanding a Trump-era order of banning  U.S. investment in Chinese companies that support China’s military to include those selling surveillance technology, calling the entities a threat to U.S. interests and values.

An executive order President Biden signed on Thursday brings to 59 the total number of Chinese companies banned from receiving American investment.

The new order “prevents U.S. investment from supporting the Chinese defense sector, while also expanding the U.S. government’s ability to address the threat of Chinese surveillance technology firms that contribute — both inside and outside China — to the surveillance of religious or ethnic minorities or otherwise facilitate repression and serious human rights abuses,” the administration said in a fact sheet describing the ban, which takes effect on Aug. 2.

The executive order does not provide detail on how the surveillance technology has been used, but U.S. officials have frequently expressed alarm over facial recognition and other surveillance tools that China has employed against its Uyghur minority population, and against pro-democracy protesters in Hong Kong.

Many of the newly targeted companies are subsidiaries and affiliates of major state-owned companies and other businesses named on the earlier blacklist. They include a clutch of companies tied to the state-owned aerospace giant Aviation Industry Corporation of China and two financing affiliates of telecommunications gear-maker Huawei Technologies Co.

The new order prevents Americans from investing in those companies, with a 60-day grace period, until Aug. 2, before sanctions begin and a one-year period for Americans already invested in the firms—either directly or via mutual and index or other funds—to divest themselves.

The action is one of the firmest to date as the Biden administration conducts a broad review of China policy, including how to deal with tariffs and other trade measures taken in past by the Trump regime.

However, some lawmakers were skeptical of the order and were concerned whether it would actually be implemented in spirit

Sen. Marco Rubio (R-Fla.) voiced the sentiment by stating “We know for a fact that Wall Street is helping to finance the Chinese Communist Party’s effort to weaken and ultimately replace American leadership. The story of the past two decades has been America’s unwillingness to confront Beijing’s exploitation of our legal, political, and financial systems. While the administration updated the Trump-era policy in important ways, I am very concerned that President Biden’s Treasury Department is too closely aligned with Wall Street to take the actions necessary to prevent American savings from being used to fund the Chinese Communist Party.”

Senior administration officials said it was important to move the program to the Treasury Department because companies such as smartphone manufacturer Xiaomi, had successfully challenged their inclusion in court. The Biden administration did not include Xiaomi on the list of 59 prohibited companies it released Thursday.