President Trump Signs Executive Ord...
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President Trump Signs Executive Order Banning Securities Investments in 31 Chinese Companies
On November 12, US President Donald Trump signed an executive order banning securities investments by Americans (Note 1) in 31 Chinese companies identified as having ties to the Chinese People's Liberation Army.
As of 9:30 a.m. ET on January 11, 2021, Americans will be prohibited from investing in designated Chinese companies through securities or otherwise. As for the securities, etc. already held, only the sale of all or part of them is permitted until 11:59 pm on November 11, 2011.
National Security Advisor Robert O'Brien commented on the purpose of the executive order: "To prevent us from providing capital," he said in a statement. The presidential decree also pointed out that Chinese private companies that support the government's military activities through China's "military-civil fusion strategy" (Note 2) are raising capital from US investors. Since June, the Trump administration has taken countermeasures against this strategy, including suspending the entry of Chinese nationals involved in the strategy (see article dated June 1, 2020).
This executive order prohibits investment in 31 companies that the U.S. Department of Defense identified in June and August 2020 as "communist Chinese military companies" under Section 1237 of the 1999 National Defense Authorization Act. restrict. In addition to telecommunications equipment giant Huawei Technologies (Huawei), surveillance camera giant Hikvision, and state-owned construction giant China Transportation Construction Co., Ltd. (CCCC), which are already on the Entity List under the U.S. Export Administration Regulations, telecommunications giants China Mobile, China Telecom, as well as companies in the chemical, nuclear and aerospace sectors. Additional companies may be included at the discretion of the Secretary of Defense or the Secretary of the Treasury. Investment in additional target companies will be prohibited from 60 days after the designation by the U.S. government, and securities, etc. already held will be prohibited until 365 days after the designation, limited to transactions that sell all or part of them. Is recognized.
Republican Senator Marco Rubio (Florida), known for his anti-China hardliners, said, "The Chinese Communist Party's exploitation of the U.S. capital markets is a clear and ongoing risk to the U.S. economy and security. "Today's action is a welcome start to the protection of our markets and investors," the president said in a statement.
(Note 1) Includes U.S. citizens, permanent residents, entities organized under U.S. law or jurisdiction within the U.S. (including foreign branches), or individuals located in the U.S.
(Note 2) According to the US State Department, the Chinese Communist Party's strategy to acquire and divert important and emerging technologies, including foreign technology, through private companies in order to develop the People's Liberation Army into a world-class military. See also the ministry's fact sheet.
(Shinichi Isobe)
