President Donald Trump views communist China as America’s chief rival and has increasingly taken steps toward an economic decoupling of the two countries in order to limit China’s growth at America’s expense.
Along those lines, Trump signed an executive order Thursday that expressly prohibits Americans from owning shares in companies that are officially designated as being tied to the Chinese military and intelligence apparatus.
The order will go into effect on January 11, 2021, and any American individuals or entities that are currently invested in such designated Chinese companies will have until November 11, 2021, to fully divest from those companies, The Daily Caller reported.
No American investment in Chinese military-linked companies
In the order signed Thursday, Trump said that “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, which 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.”
He noted that the “key” to the development of China’s “military, intelligence, and other security apparatuses” is its ties to the large and supposedly private economy which, in reality, is a sort of “Military-Civil Fusion” that the communist regime uses to strengthen its own military-industrial complex by compelled contributions from “ostensibly private” Chinese companies.
“At the same time, those companies raise capital by selling securities to United States investors that trade on public exchanges both here and abroad, lobbying United States index providers and funds to include these securities in market offerings, and engaging in other acts to ensure access to United States capital,” Trump wrote. “In that way, the PRC exploits United States investors to finance the development and modernization of its military.”
Given all of that, the president declared a “national emergency” in terms of how the “PRC’s military-industrial complex, by directly supporting the efforts of the PRC’s military, intelligence, and other security apparatuses, constitutes an unusual and extraordinary threat, … to the national security, foreign policy, and economy of the United States.”
Trump proceeded to prohibit any transactions of publicly-traded securities with certain Chinese companies designated by the U.S. government as having direct or indirect ties to the communist Chinese military and intelligence service.
A national security issue
The Daily Caller noted that National Security Adviser Robert O’Brien said in a statement, “The President’s action serves to protect American investors from unintentionally providing capital that goes to enhancing the capabilities of the People’s Liberation Army and People’s Republic of China intelligence services, which routinely target American citizens and businesses through cyber operations, and directly threaten the critical infrastructure, economy, and military of America and its allies and partners around the world.”
Fortune reported Friday that President Trump’s order had an almost immediate negative impact on the stock value of certain Chinese companies — such as China Mobile Ltd. and China Telecom Corp. Ltd. — that will almost certainly be affected by the prohibition on American investment.
Previously, communist Chinese officials in Beijing have threatened to retaliate in kind to Trump’s economic actions. But given the apparent electoral victory of Democratic nominee Joe Biden, it is suspected that the regime will refrain for now from retaliation as it waits to see what the prospective Biden administration’s stance toward China will be, and whether Biden will undo Trump’s order.