The Biden administration has reinstated and increased Trump-era bans on investing in Chinese enterprises that are deemed supportive of the country’s surveillance and military infrastructure. Major technology, space, and telecommunications businesses are among the 59 businesses covered by the presidential order, with more to follow by Treasury order.
“I believe that the use of Chinese surveillance technology outside the PRC, as well as the development or use of Chinese surveillance technology to facilitate repression or serious human rights violations, constitute unusual and extraordinary threats,” writes President Biden in the order’s introduction.
The E.O. stems from the Trump administration’s long-running and evolving blacklist of Chinese corporations for government procurement, private investment by US corporations, and other objectives. Major technology firms including as ZTE and Huawei were included to the list immediately in 2019, but others were gradually added over time.
The Biden directive revises and expands on prior restrictions, notably in the understanding of what constitutes risky activity or coordination with Chinese officials. Notably, it broadens this to include firms engaged in internal monitoring on Uygur Muslims in China as well as political dissidents in Hong Kong and abroad.
The new list of companies includes many of those listed over the last two years and adds plenty more. Seemingly any major company that deals with tech, communications or aerospace is at risk of being entered on the list, from China Mobile and China Unicom to China Aerospace, Hikvision and SMIC. Direct investment in the companies is disallowed, as is investing in an intermediary such as an index fund that includes one of the prohibited companies.