WASHINGTON (CN) — American businesses will be prohibited from investing in Chinese companies that manufacture security and surveillance equipment, after President Joe Biden extended a ban Thursday first issued by former President Donald Trump.
Shortly after the 2020 presidential election, Trump signed an executive order that blocked American investment in companies believed to be working in concert with the Chinese military. Biden’s executive order Thursday would allow the U.S. “in a targeted and scoped manner," to block American investment in Chinese defense or surveillance technology companies deemed to be national security threats.
“This E.O. prevents U.S. investment from supporting the Chinese defense sector, while also expanding the U.S. Government’s ability to address the threat of Chinese surveillance technology firms that contribute – both inside and outside China – to the surveillance of religious or ethnic minorities or otherwise facilitate repression and serious human rights abuses,” a White House fact sheet states.
A total of 59 Chinese companies are targeted by the order set to take effect in August.
Both Huawei Technologies, a global leader in 5G technology, and Hangzhou Hikvision Digital Technology, a video surveillance manufacturer, were already included in the investment ban for supporting China's military, but Thursday's order also adds them to the list on the grounds of producing surveillance technology.
Xiaomi, a Chinese smartphone manufacturer that successfully sued the federal government to be removed from the list, was notably not included in Thursday’s executive order.
The order signals that Biden is continuing his predecessor's tough stance toward Beijing. The Trump administration banned the export of U.S. technology to Huawei based on accusations that its smartphones and other products could be easily tapped by the Chinese Communist Party, compromising U.S. national security. The tech giant has also been accused of stealing trade secrets.
Last June, the U.S. first barred 20 companies from doing business with U.S. investors before expanding the list to 31 through Trump's order related to divestment in Chinese military firms.
In August, the U.S. added two dozen Chinese companies to the sanctions list for their role in constructing military islands in the South China Sea. More than 3,000 acres across seven islands have expanded the country’s military reach, with construction first beginning in 2013.
Biden and Chinese President Xi Jinping spoke shortly after Biden’s inauguration, where the U.S. president stressed protecting the security of the American people and raised concerns about ongoing human rights abuses against the Uyghur Muslims in China's Xinjiang region. According to a readout of the call, Biden also spoke to China’s “unfair economic practices” and the president “committed to pursuing practical, results-oriented engagements” to protect those interests.
The White House's announcement last week that it is further investigating the origins of Covid-19 has also soured the two countries’ relationship. Chinese Foreign Ministry spokesperson Zhao Lijian said in a statement last Wednesday that some U.S. officials “talk about ‘facts,’ when what is really on their mind is political manipulation.”
“Every time when the issue of pandemic is brought up, they smear and attack China while totally ignoring the doubts over the origin-tracing work and failure of pandemic response in the U.S.,” he said. “They are obsessed with spreading ‘lab leak theory’ and other conspiracy theories and disinformation.”
The Treasury Department will enforce the new investment ban, according to Thursday's order.
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