Americans will no longer be able to invest in Chinese companies that support Chinese military or intelligence activity under an executive order signed Thursday by President Donald Trump.
The order applies to individuals or companies owning shares or through funds holding shares in 31 Chinese companies that the White House has identified as helpful to China's People's Liberation Army. The ban applies to transactions beginning Jan. 11, 2021.
"(T)he People's Republic of China (PRC) is increasingly exploiting United States capital to resource and to enable the development and modernization of its military, intelligence, and other security apparatuses, which continues to allow the PRC to directly threaten the United States homeland and United States forces overseas, including by developing and deploying weapons of mass destruction, advanced conventional weapons, and malicious cyber-enabled actions against the United States and its people," Mr. Trump said in the order.
He goes on to say that China's "ostensibly private economy" is compelled to support its military and intelligence activities. "At the same time, those companies raise capital by selling securities to United States investors that trade on public exchanges both here and abroad, lobbying United States index providers and funds to include these securities in market offerings, and engaging in other acts to ensure access to United States capital. In that way, the PRC exploits United States investors to finance the development and modernization of its military," said the order, which declared the threat a national emergency.