- The US has banned investments in 59 Chinese companies.
- Huawei, SMIC, and other Chinese tech and defense companies are also on the list.
The Biden administration has issued an executive order to ban US entities from investing in Chinese firms with alleged ties to Chinese military or surveillance sectors.
Reuters reports that the new list includes 59 Chinese companies. The treasury department will enforce this list and update it on a “rolling basis.”
Major Chinese tech firms on the new investment ban list include Huawei, Chinese semiconductor foundry SMIC, and video surveillance company Hikvision. Other companies on the list include Chinese defense firms.
“I find that the use of Chinese surveillance technology outside the PRC (People’s Republic of China) and the development or use of Chinese surveillance technology to facilitate repression or serious human rights abuse constitute unusual and extraordinary threats,” Biden said in the order.
A senior official told Reuters that more companies could be added to the investment embargo list in the coming months.
The order says that the ban would take effect on August 2. US investors will still have 365 days from the date of this or future listings to divest their holdings from the banned companies.
We’re not certain how much the new orders will impact Huawei’s already dwindling global smartphone business. However, it’s certainly not good news for the company which is also still on the infamous US Entity List.
Meanwhile, analysts believe that semiconductor firms like SMIC might not be impacted much as they would get support from the Chinese government.