Biden order to ban investment in 59 Chinese defense and tech firms

Luokung Technology

03/06/2021 18:30

By Michael Martina
    WASHINGTON, June 3 (Reuters) - The Biden administration will
issue a new executive order on Thursday that bans U.S. entities
from buying or selling publicly traded securities for 59 Chinese
companies with alleged ties to defense or surveillance
technology sectors, senior administration officials said.
    The Treasury Department will enforce and update on a
"rolling basis" the new ban list, which replaces one from the
Department of Defense, the officials, noting the policy would
take effect on Aug. 2. 
    The new order, which is an effort to make a similar
Trump-era prohibition more legally sound, signals the
administration's intent to "ensure that U.S. persons are not
financing the military industrial complex of the People's
Republic of China", one of the senior officials told reporters. 
  
    The inclusion of Chinese surveillance technology firms
expanded the scope of the previous order, the officials said.  
    "We fully expect that in the months ahead ... we'll be
adding additional companies to the new executive order's
restrictions," an official said. 
    President Joe Biden has been reviewing a number of aspects
of U.S. policy towards China, and his administration had delayed
the implementation of the previous order while it formulated its
new policy framework.  urn:newsml:reuters.com:*:nL2N2N526P 
    The move is part of a broader series of steps to counter
China, including reinforcing U.S. alliances and pursuing large
domestic investments to bolster U.S. economic competitiveness,
amid increasingly sour relations between the world's two most
powerful countries.
    Biden's Indo-Pacific policy coordinator Kurt Campbell said
last month that a period of engagement with China had come to an
end and that the dominant paradigm in bilateral ties going
forward would be one of competition.  urn:newsml:reuters.com:*:nL2N2ND2WV
    The Treasury Department is expected to issue the full list
later on Thursday, and give guidance on what the scope of
surveillance technology means, including whether companies are
facilitating "repression or serious human rights abuses" in or
outside of China, one of the officials said. 
    "We really want to make sure that any future prohibitions
are on legally solid ground. So, our first listings really
reflect that," a second senior administration official said.
    Investors would have time to "unwind" investments, a third
official said. 
    In May, a judge signed an order removing the designation on
Chinese mobile phone maker Xiaomi  1810.HK , which was among the
more high-profile Chinese technology companies that the Trump
administration targeted for alleged ties to China's military.
    The judge later also suspended an ban imposed on Luokung
Technology Corp  LKCO.O , a Chinese mapping technology company.
    The Department of Defense had also placed similar
restrictions on China's Semiconductor Manufacturing
International Corporation 0981.HK, a firm key to China's
national drive to boost its domestic chip sector.

 (Reporting by Michael Martina
Editing by Alistair Bell)
 ((michael.martina@thomsonreuters.com;))