The order bars American companies and individuals from owning stakes in Chinese companies the White House says help the advancement of the People’s Liberation Army.
Washington DC: President Donald Trump on Thursday signed an executive order barring Americans from investing in a collection of Chinese companies that the White House believes support Beijing’s military.
The order prohibits American companies and individuals from owning shares — outright or through investment funds — in companies the administration says help the advancement of the People’s Liberation Army.
National Security Advisor Robert C O'Brien in an official statement said that order is to "protect American investors from unintentionally providing capital" to enhance the intelligence services of the Chinese government and People's Liberation Army (PLA).
"Today, President Donald J. Trump signed an Executive Order to protect American investors from funding Communist Chinese military companies, including those designated by the Department of Defense in June and August of 2020."
The order goes into effect from January 11.
“The People’s Republic of China (PRC) is increasingly exploiting United States capital to resource and to enable the development and modernization of its military, intelligence, and other security apparatuses,” the President said in the order.
That investment “continues to allow the PRC to directly threaten the United States homeland and United States forces overseas, including by developing and deploying weapons of mass destruction, advanced conventional weapons, and malicious cyber-enabled actions against the United States and its people.”
The NSA said since many of these companies are publicly traded on stock exchanges around the world, and individual investors in the United States can unknowingly provide funds to them through passive institutional investment vehicles such as mutual funds and retirement plans.
"President Trump has no higher priority than the security of the American people," O'Brien added.
According to an earlier report by South China Morning Post, experts and former officials say they fear a growing risk that he could make disruptive moves to double down on priorities and tie his successor's hands in his final months in the White House.
Experts added that China could be a particular target, given Trump's repeated efforts to blame Beijing for the Covid-19 pandemic and the economic conditions of the United States, says Mark Magnier in the South China Morning Post.
"Trump has promised to punish China for COVID-19, so the question is, what does that mean," said Jeff Moon, principal at China Moon Strategies and former National Security Council official.
Beyond taking the potentially explosive step of labelling China guilty of genocide for the mass detention of Uyghurs in Xinjiang, Trump could attempt to block visas for more Communist party officials, or make trouble by trying to order US athletes to skip the Beijing 2022 Winter Olympics.
Other Trump options may include subjecting more Chinese state-owned companies to sanctions, expanding restrictions on "dual-use" civilian-military exports, banning more Chinese apps after its TikTok and WeChat campaigns and blocking all semiconductor sales to Huawei Technologies beyond those for 5G networks.
(With inputs from agency)
Last Updated 13, Nov 2020, 10:56 AM