According to the latest news, yesterday, US President Joe Biden signed an executive order expanding the Trump era ban on Americans investing in Chinese companies who are alleged to have ties with the Chinese military.
The order has been increased from 48 to 59 Chinese companies now. It also rewrites a previous order issued by former President Donald Trump to include companies that create and deploy surveillance technology such as the technology used against Muslim minorities and dissidents in Hong Kong. In simple words, this means Biden wishes to continue some of the China-related policies initiated by the Trump administration.
It is to be noted that the new order does not include DJI, WeChat, TikTok, or ByteDance among the 59 companies. Last year, Trump signed an executive order to ban Chinese apps like TikTok and WeChat from US app stores. Back in February, the Biden administration asked a federal appeals court to place a hold on legal proceedings of these app bans. As of now, it is unclear how Biden will address the TikTok ban case.
Yesterday, a White House official told Yahoo News, “We fully expect that in the months ahead … we’ll be adding additional companies to the new executive order’s restrictions.”The New York Times reported that the move is part of the Biden administration’s commitments in refusing human rights abuses in China.
The new order bans Americans from investing in these additional Chinese firms from 2nd August onwards. The order extends to Americans investing in funds too allowing current investors to divest their holdings over a period of one year. This new order has made the Treasury Department in charge of these companies.
It should be noted that the federal government has been pushing against Chinese tech and telecom companies for the last couple of years. Last year, the Federal Communications Commission pointed out Chinese telecom companies Huawei and ZTE as threats to national security. It was claimed that Huawei sold surveillance technology as part of a package deal.
It was estimated by FCC last September that “rip and replace” equipment from these firms would cost around $1.8 billion but so far Congress has not allocated any funding for this matter. It would be interesting to see how things materialize for both the US and for China.