The Biden government has issued an executive order to prohibit US companies from investing in Chinese companies with alleged links to the 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 technology companies on the new prohibited investment list include Huawei, Chinese semiconductor foundry SMIC and video surveillance company Hikvision. Other companies on the list are Chinese defense companies.
“I find that the use of Chinese surveillance technology outside of the PRC (People’s Republic of China) and the development or use of Chinese surveillance technology to facilitate repression or serious human rights violations pose unusual and exceptional threats,” Biden said in the order.
A senior official said Reuters that further companies could be added to the investment embargo list in the coming months.
The decision said the ban would come into effect on August 2nd. US investors have 365 days from the date of this or future listings to dispose of their holdings in the banned companies.
Previously, Xiaomi was also on this investment refusal list. However, the smartphone maker lifted the ban after winning a lawsuit against the US government.
We’re not sure how much the new orders will affect Huawei’s already shrinking global smartphone business. For the company, which is also still on the infamous US Entity List, this is certainly not good news.
Meanwhile, analysts believe semiconductor companies like SMIC may not be very affected as they are backed by the Chinese government.
