President Trump signed a new executive order that reinforces the regulations published in November 2020 that seek to limit U.S. investments in companies linked to the Chinese Communist Party (CCP) military and intelligence.
According to the executive order signed on Nov. 11, 2020 by President Trump, Americans are prohibited from investing in a group of 35 Chinese companies that, according to the classification of the Department of Commerce, supply and support the Chinese military and its intelligence apparatus. As stated in the order, that list may be modified as determined by the authorities of the Department of Security.
The companies affected include China Telecom, China Mobile, and China Unicom, all large firms listed on major stock exchanges.
Exploitation by the CCP
President Trump was instrumental in issuing the executive order and noted, “The People’s Republic of China is increasingly exploiting U.S. capital to obtain resources to enable the development and modernization of its military, intelligence, and security apparatus. This is causing the People’s Republic of China [the CCP] to directly threaten the homeland of the United States and American forces abroad.”
The executive order is intended to prevent local investors from providing funds to these firms through passive institutional investment vehicles, and unknowingly collaborating with the development of the CCP’s military and intelligence apparatus.
No financing of CCP military through backdoors
The aim of this new blow by the Trump administration to the Chinese communist regime is that the large number of Chinese firms connected to its army and intelligence apparatus will not be financed by private U.S. capital.
The new executive order seeks to expand the scope of the initial November 2020 executive order, which originally only restricted U.S. investors from participating in the above companies.
“Today, I signed an Executive Order amending Executive Order 13959. The amendments prohibit certain sales as well as purchases of publicly traded securities, or any securities that are derivative of, or are designed to provide investment exposure to such securities, of any Communist Chinese military company,” President Trump said in a letter to the House on Wednesday.
Breaking the CCP’s free ride at the expensive of the U.S.
He added, “Possession of such securities by U.S. persons is also prohibited one year after a company is determined to be a Chinese military company.”
During the Trump administration, and especially during the past year, many actions have been taken to identify companies in the United States with ties to the CCP and its intelligence apparatus that are involved in illegal activities such as information theft, tax evasion, and exploitation of workers in underground labor centers in China.
According to accusations in recent months by the Trump administration, for many years, as a result of corrupt governments, Chinese companies have been allowed to take advantage of U.S. capital markets, without being required to comply with local rules, causing disadvantages for local companies and U.S. technology that has been exploited by the Chinese communist regime’s military for its own benefit.
It is hoped that these measures will succeed in imposing some sort of brake on the communist advance on the U.S. economy, and serve as a protection against threats to national security.