President Joe Biden recently signed a new executive order that amended Trump’s E.O. 13959 (from November 12, 2020), which was designed to keep American investments out of Chinese SOEs (state owned enterprises), specifically ones related to the Chinese military-industrial complex. This amended EO (Executive Order) should make it harder to invest in Chinese companies.
According to a fact sheet released by the White House, “President Biden signed an Executive Order (E.O.) to further address the ongoing national emergency declared in E.O. 13959 of November 12, 2020 with respect to the threat posed by the military-industrial complex of the People’s Republic of China (PRC).”
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More specifically regarding what Biden did, the White House stated that “President Biden also expanded the scope of this national emergency by finding that the use of Chinese surveillance technology outside the PRC, as well as the development or use of Chinese surveillance technology to facilitate repression or serious human rights abuses, constitute unusual and extraordinary threats. This E.O. allows the United States to prohibit – in a targeted and scoped manner – U.S. investments in Chinese companies that undermine the security or democratic values of the United States and our allies.”
The report goes on to outline the key features of the amended executive order, listing its main purposes as being to:
- Solidify and strengthen a previous E.O to prohibit U.S. investments in the military-industrial complex of the People’s Republic of China
- Ensure that U.S. investments are not supporting Chinese companies that undermine the security or values of the United States and our allies
- The President listed the following 59 entities as subject to the E.O.’s prohibitions
So, to combat the US financing its own demise, the Biden Admin has identified and banned investment in 59 Chinese firms. They are:
“Defense and Related Materiel Sector of the Economy of the PRC:
Aero Engine Corporation of China; Aerospace CH UAV Co., Ltd; Aerospace Communications Holdings Group Company Limited; Aerosun Corporation; Anhui Greatwall Military Industry Company Limited; Aviation Industry Corporation of China, Ltd.; AVIC Aviation High-Technology Company Limited; AVIC Heavy Machinery Company Limited; AVIC Jonhon Optronic Technology Co., Ltd.; AVIC Shenyang Aircraft Company Limited; AVIC Xi’An Aircraft Industry Group Company Ltd.; Changsha Jingjia Microelectronics Company Limited China Academy of Launch Vehicle Technology; China Aerospace Science and Industry Corporation Limited; China Aerospace Science and Technology Corporation; China Aerospace Times Electronics Co., Ltd; China Avionics Systems Company Limited; China Communications Construction Company Limited; China Electronics Technology Group Corporation; China General Nuclear Power Corporation; China Marine Information Electronics Company Limited; China Mobile Communications Group Co., Ltd.; China National Nuclear Corporation; China National Offshore Oil Corporation; China North Industries Group Corporation Limited; China Nuclear Engineering Corporation Limited; China Railway Construction Corporation Limited; China Satellite Communications Co., Ltd.; China Shipbuilding Industry Company Limited; China Shipbuilding Industry Group Power Company Limited; China South Industries Group Corporation; China Spacesat Co., Ltd.; China State Shipbuilding Corporation Limited; China Telecommunications Corporation; China United Network Communications Group Co., Ltd.; Costar Group Co., Ltd.; CSSC Offshore & Marine Engineering (Group) Company Limited; Fujian Torch Electron Technology Co., Ltd.; Guizhou Space Appliance Co., Ltd; Hangzhou Hikvision Digital Technology Co., Ltd.; Huawei Technologies Co., Ltd.; Inner Mongolia First Machinery Group Co., Ltd.; Inspur Group Co., Ltd.; Jiangxi Hongdu Aviation Industry Co., Ltd.; Nanjing Panda Electronics Company Limited; North Navigation Control Technology Co., Ltd.; Panda Electronics Group Co., Ltd.; Semiconductor Manufacturing International Corporation; Shaanxi Zhongtian Rocket Technology Company Limited; and Zhonghang Electronic Measuring Instruments Company Limited.
Surveillance Technology Sector of the Economy of the PRC:
Hangzhou Hikvision Digital Technology Co., Ltd. and Huawei Technologies Co., Ltd.
Own or Control, or Owned or Controlled by, Directly or Indirectly, a Person Who Operates or Has Operated in at Least One of These Two Sectors of the PRC Economy, or a Person Who Is Listed in the Annex to the E.O.:
China Communications Construction Group (Limited); China Electronics Corporation; China Mobile Limited; China Telecom Corporation Limited; China Unicom (Hong Kong) Limited; CNOOC Limited; Huawei Investment & Holding Co., Ltd.; Panda Electronics Group Co., Ltd.; Proven Glory Capital Limited; and Proven Honour Capital Limited.”
While these are steps in the right direction, it should be noted that the new EO doesn’t take effect until August 2nd of 2021. That ~2 month period might give the above listed entities time to find a way to restructure, rename themselves, or otherwise avoid the ban.
Despite that, all Americans should view this development positively. We should be celebrating any effort to roll back or otherwise fight Chinese growth and punish the evil Chinese state. Biden’s Amendment to Trump’s EO and make it harder to invest in Chinese companies is a good start.