On Thursday, President Biden signed an executive order barring US investment in 59 Chinese companies, taking effect on August 2, as part of an attempt to maintain national security. The ban covers companies such as Huawei and Semiconductor Manufacturing International Corporation (SMIC), which Washington believes is central to the Chinese military. The ban also applies to large telecommunications companies such as China Mobile, China Telecom, China Unicom, and other companies like China Railway Construction Corporation and China National Nuclear Corporation. US investors can still make trades in the next 12 months to sell their holdings, but only after seeking permission from the US Treasury. The administration has specifically banned investment into Chinese debt and equity securities and funds holding these investments in their portfolio. The US is also concerned about Chinese companies with links to the People’s Liberation Army as per FT and legislative orders also include more surveillance companies, such as Hikvision. However, Republican Senator Marco Rubio stated Wall Street’s recent association with China and the close alignment of the US Treasury and Wall Street inhibits “the actions necessary to prevent American savings from being used to fund the Chinese Communist Party”.
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