President Joe Biden has signed an executive order extending a Trump-era ban on Americans investing in Chinese companies with alleged ties to the Chinese military. The order increases the number of restricted Chinese companies from 48 to 59. It also rewrites an earlier order issued by former President Donald Trump to include companies that create and deploy surveillance technology, such as the technology used against Muslim minorities and dissidents in Hong Kong.
The move indicates that Biden plans to continue some of the China-related policies previously put in place by the Trump administration. It does not include DJI, WeChat, TikTok, or parent company ByteDance, among the 59 companies. This is despite previous concerns about these company's ties to China.
Last year, Trump signed an executive order to ban Chinese apps, such as Tik Tok and WeChat, from US app stores. But Biden's order is separate from Trump's move to ban these apps.
Restricting US Investment
And in February, the Biden administration asked a federal appeals court to suspend any legal actions related to blocking these apps. It remains unclear how Biden plans to counter the ban on Tik Tok in the future. In the coming months, we expect to add more companies to the restrictions of the new executive order, a White House official said.
The New York Times reported that the move is part of the commitments of the Biden administration, which refuses to facilitate human rights abuses in China. The Chinese government has for years used a combination of facial recognition technologies, phone scanners, and artificial intelligence as part of a sweeping surveillance campaign to empower the Chinese police force.
The order prohibits Americans from investing in these additional Chinese companies starting August 2. This extends to Americans investing in funds that then invest in Chinese companies as well. The order allows existing investors in these companies to liquidate their holdings within a one-year period.
Under this new order, the Treasury Department will be responsible for the list of banned companies. The Trump administration had previously placed power in the hands of the Department of Defense.
The federal government has been pressing for broader action against Chinese technology and telecom companies for years. The Federal Communications Commission last year designated carriers Huawei and ZTE as national security threats. In addition, surveillance technology is sometimes sold as part of a package deal when countries abroad buy Huawei equipment.
Last September, the Federal Communications Commission estimated that the cost of replacing equipment from these companies would be $1.8 billion.