US delays China investment ban as Biden team aims to clarify policy scope

·2-min read

The Joe Biden administration extended the deadline to ban American investors from certain Chinese companies by two weeks as his team tries to clarify the scope of policies made under the Trump administration.

In an announcement on Tuesday, the Treasury Department said US investors were allowed to trade securities in subsidiaries of Chinese companies that were on a blacklist until June 11.

An executive order former president Donald Trump signed on November 12 prohibited US investment in companies the Defence Department claimed had Chinese military ties. As many as 44 Chinese companies, including Huawei and Hikvision, have landed on this list.

Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.

The Biden administration review will look at whether the policies against Chinese companies should be reworked, or even revoked.

A specific issue with this November executive order was that it was unclear whether any subsidiary or companies with names similar to the blacklisted firms were also included in the ban. Confusion quickly set in on Wall Street as the order did not clearly specify the scope of the companies covered.

The Treasury said all transactions with subsidiaries of four companies – China National Offshore Oil Corp (CNOOC), China Mobile, China Telecom and China Unicom (Hong Kong) – were not authorised.

In January, the New York Stock Exchange, which was home to a handful of blacklisted Chinese companies including three telecoms carriers, made two reversals within two days in its delisting decisions of the trio.

US fixation on China casts shadow over vaccine pledge: Beijing

Immediately after Biden took office, Chinese companies including Xiaomi, Luokung Technology, and Huawei filed lawsuits, saying the claimed military associations were unfounded.

Three Chinese telecommunications carriers appealed the stock exchange for a review to reconsider its decision.

In early May, the New York Stock Exchange shot down their appeals and filed with the Securities and Exchange Commission on May 7 to delist the trio.

The telecoms companies stressed that they have complied “with the laws and regulations, market rules as well as regulatory requirements”.

In contrast, Xiaomi and Luokung both won court battles to be exempted from sanctions.

More from South China Morning Post:

This article US delays China investment ban as Biden team aims to clarify policy scope first appeared on South China Morning Post

For the latest news from the South China Morning Post download our mobile app. Copyright 2021.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting