News Analysis
President Donald Trump’s latest executive order bars U.S. investors from holding ownership stakes in a list of 31 Chinese companies designated to have ties with various Chinese Communist Party (CCP) military apparatuses.
This order, while somewhat limited in scope, ensnares several well-known Chinese companies, including non-public companies such as Huawei and publicly traded companies such as China Mobile and Hangzhou Hikvision. The 31 companies were previously designated by the Pentagon as being “owned or controlled” by the People’s Liberation Army (PLA), the official name of the Chinese military. (The list of companies can be found here and here.)
The action could be a sign of things to come for Chinese companies with close ties to the CCP; U.S. capital could prove increasingly hard to come by. In addition, examining the foreign ownership base of these companies reveals that a number of them are partially owned by prominent U.S. investment firms, insurance companies, and pension funds.
Trump’s latest measure at restricting Chinese companies would prevent U.S. capital from funding China’s military and intelligence agencies that could hurt U.S. interests. It bans U.S. citizens and companies from purchasing new shares of the listed companies beginning Jan. 11, 2021. Current investors who own shares of these companies have about a year, until November 2021, to exit their investments.
U.S. Sen. Marco Rubio (R-Fla.), a notable China hawk, applauded the decision, saying in a Nov. 12 statement that China’s “exploitation of U.S. capital markets is a clear and ongoing risk to U.S. economic and national security.”
Diving Into U.S. Investor Ownership
An analysis by The Epoch Times of ownership of these 31 Chinese companies reveals that billions of U.S. capital have already flowed into shares of these companies,