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US President Donald Trump makes tough decisions at the end of his term. Trump’s political stance on China has been unchanged for nearly four years.
Orders stopped at the end of the term
According to the Bloomberg, the administration of US President Donald Trump has just put more than 60 Chinese companies on the “black list” to “protect the national security of the United States.”
On the list, there are many notable names such as China’s largest chipmaker, SMIC, drone maker DJI, Beijing Institute of Technology, China Communications Construction Company, and more than a dozen research institutes are. connected with China State Shipbuilding Corporation …
Previously, on the blacklist were the names of major Chinese corporations such as Huawei Technologies Co and 150 affiliates, ZTE Corp, and surveillance camera maker Hikvision.
With this ban, publicly traded Chinese companies will almost certainly not be able to buy US components and technology, as US companies must obtain a license to sell equipment and technology to companies. this business.
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| Trump added a bunch of Chinese companies to the blacklist. |
The reason SMIC is blacklisted is because the Trump administration believes that this company is related to the Chinese military. Concerned DJI products are being used to trigger human rights violations in China and elsewhere.
A day earlier, Trump signed a law to expel Chinese companies from the US stock market if the US financial management agency does not verify the results of the audit. The above law applies to all foreign companies, but the main subjects are Chinese companies.
For many years, a number of Chinese companies issued initial public offerings (IPOs) in the United States to raise capital. It is considered dangerous for Chinese companies to freely “ignore” the information disclosure regulations that US companies must comply with.
Before that, China objected to the US financial management agency not verifying the audit results of Chinese companies listed on the US stock exchange for “national security” reasons.
The new Trump administration law is expected to better protect American investors, as well as other publicly traded companies, by ensuring that all companies listed on the U.S. stock exchange must comply with general regulations.
Observers said the new US law could affect large Chinese corporations such as Alibaba or Baidu, … SMIC shares fell more than 8% in the last week.
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| Trump plans to expel Chinese companies from the US stock market. |
US-China relations: tensions still linger
The new law signed by Trump is a serious blow to ambitions to attract capital and enhance the technological power of Chinese corporations.
The market responded immediately. According to the ReutersMSCI said it would remove 10 Chinese companies, including major corporations such as China Communications Construction Co., Hangzhou Hikvision, SMIC and CRRC Corp. out of its indicators.
As expected, the shares of Chinese companies will be canceled on January 5. After that, a large inflow of many trillions of dollars in funds from the funds could be withdrawn from Chinese companies.
Previously, Nasdaq also included Chinese companies removed from this index with names such as: China Communications Construction Co, China Railway Construction Corp, CRRC Corp, Semiconductor Manufacturing International Corp.
FTSE Russell and S&P Dow Jones Indices have also announced the removal of Chinese stocks from their indices.
In November, the Trump administration prohibited investment firms, intellectual funds, and many other companies from buying stakes in dozens of Chinese companies as of January 11, 2021. All of these are companies identified by the United States Department of Defense as linked to the Chinese army.
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| The war between the United States and China is expected to last. |
As can be seen, on a scale of several tens of trillions of dollars, the elimination of Chinese companies does not have much effect on the large baskets of indices. However, the impact on Chinese companies is enormous.
The decisions of MSCI, Nasdaq, … show the rapid effectiveness of the Donald Trump administration’s ban to limit the access of Chinese companies to the global capital market.
For years, American investors have unknowingly spent money on Chinese military companies and this will end, the White House representative said.
The latest decision reinforces Trump’s tough stance on China, which he has been pursuing for the past four years. The measure also garnered high support from the United States Congress.
In the medium and long term, Trump’s political legacies for China may be altered, but in the short term it is difficult to reverse despite growing tensions between the United States and China and Beijing threatened to retaliate.
Tensions between the United States and China escalated during Trump’s tenure, as China emerged in force, possibly becoming an economic power that threatens America’s number one position. The United States and China disagree on many issues, from trade, finance, currency, … and recently the Covid-19 epidemic.
M. Ha
