Huawei Technologies and three other top telecommunications companies are on the list. Picture: REUTERS/ALY SONG
Huawei Technologies and three other top telecommunications companies are on the list. Picture: REUTERS/ALY SONG

Washington — President Joe Biden signed an order on Thursday amending a ban on US investment in Chinese companies begun under his predecessor, naming 59 firms with ties to China’s military or in the surveillance industry, including Huawei Technologies and the country’s three biggest telecommunications companies.

The ban on new investments will take effect on Augugust  2 in New York, according to administration officials who briefed reporters on condition of anonymity. Investors will have one year to fully divest.

Biden’s order is largely a continuation of a policy issued by former president Donald Trump that was challenged in court and confused investors over the extent of its reach to subsidiaries of blocked companies. Biden’s position on Trump’s order has been closely watched by Wall Street and Capitol Hill, where legislators from both parties have called for a strong stance against China over issues ranging from trade to human rights.

Many of the companies in Biden’s order were already on the Trump administration’s list, including the nation’s largest telecoms: China Mobile Communications Group, China Unicom and China Telecommunications Corporation.

Among the defence companies on Biden’s list are Aviation Industry Corporation of China, which is one of the best known of the Chinese military giants; China North Industries Group; China Aerospace Science and Industry Corporation; and China Shipbuilding Industry.

Biden’s list also includes Hangzhou Hikvision Digital Technology, the developer of surveillance cameras and facial-recognition technology that has helped Chinese authorities roll out “safe city” initiatives in Xinjiang, where ethnic Uyghurs have faced persecution.

Companies on Biden’s list that weren’t covered in Trump’s initial ban include Zhonghang Electronic Measuring Instruments and Jiangxi Hongdu Aviation Industry.

Others include: Proven Honour Capital; Proven Glory Capital; Shaanxi Zhongtian Rocket Technology; Inner Mongolia First Machinery Group; Changsha Jingjia Microelectronics; China Avionics Systems Company; China Satellite Communications; China-based Costar Group; Fujian Torch Electron Technology; and Guizhou Space Appliance.

The treasury department released guidance on the penalties later on Thursday. The treasury will update the list on a rolling basis, one of the officials said.

Under Biden’s order, the investment prohibitions will apply to subsidiaries of companies only if they are listed by the Office of Foreign Assets Control (OFAC). The amended order clarifies that the measures will no longer apply to companies whose names closely match the listed entities, the Biden administration officials said.

The OFAC’s list will be co-ordinated with the state and defence departments. The Pentagon, which is required by Congress to keep a list of companies linked to the Chinese military, is expected to release additional company names on Thursday. Some companies will be listed by the Pentagon and the OFAC, the officials said.

The amendment to Trump’s order comes after two Chinese companies successfully challenged it in US court. Biden’s team said a revision was necessary to ensure it was legally sound and sustainable in the long term.

Bloomberg News. More stories like this are available on bloomberg.com

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