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[Washington, 12 de Reuters]- The US Trump administration announced on the 12th a presidential decree prohibiting investment in Chinese companies believed to be owned or controlled by Chinese troops. China Telecom, a major state-owned telecommunications company in China0728.HKAnd China Mobile (China Mobile)0941.HK, Hangzhou Kaiyasu, a major surveillance camera, numerical technology (Hike Vision)002415.SZEtc. can be affected.
Beginning on January 11 next year, China will aim to prevent US investment firms and pension funds from buying and selling the shares of 31 Chinese companies designated by the US Department of Defense this year as backed by the Chinese army. Trading in corporate securities is prohibited.
In addition, companies certified as Chinese military companies will be prohibited from buying and selling securities by Americans from 60 days later.
President Trump said China “is using US capital to promote the development and modernization of security equipment, such as military and intelligence activities, that directly threaten the continental United States and US troops abroad.” ..
The Chinese embassy in Washington has not commented.
President Navarro’s commerce assistant estimates that the market value of Chinese companies and their subsidiaries has reached at least $ 500 billion.
“The purpose of this comprehensive presidential decree is to curb the American capital used to militarize China,” he told Reuters.
With this presidential decree, relations between the United States and China are likely to worsen.
US Senator Marco Rubio, a hardliner against China, also introduced a bill last month that prohibits access to the US capital market for Chinese companies on the US government’s blacklist. This presidential decree includes a part of the content of this bill.
Representative Rubio has stated that he welcomes the presidential decree.
In August, the U.S. Securities and Exchange Commission (SEC) and the Ministry of Finance also advised Trump to delist Chinese companies listed in the United States if they fail to meet accounting auditing standards. from the U.S. by January 2022.
The reaction of the US stock market on the 12th was limited.
“The market is concerned that Mr. Trump has two months left to increase tensions with China and Iran,” said Chris Zakarelli, chief investment officer at the Independent Advisor Alliance.
It is unclear how investors will react to this presidential decree. It is only forbidden to buy and sell, and it seems possible to continue holding values that you already have.
Although no specific sanctions are specified, the Ministry of Finance can exercise “all powers” allowed by the International Emergency Economic Authority Act (IEEPA). Strict penalties can be enforced under IEEPA.
It is unclear whether Byden, who will take office as the new president nine days after the presidential decree takes effect, will continue to apply or abolish the presidential decree. Byden’s camp has not commented.
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