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Trump signs executive order banning American investments financing Chinese military
© WikiMedia (Official White House Photo by Shealah Craighead)
Trump signs executive order banning American investments financing Chinese military

US President Donald signed passed an executive order Thursday that bans American investment in Chinese companies linked to the country’s military.

The executive order indicates that “the PRC exploits United States investors to finance the development and modernization of its military.” The concern is with Chinese military firms raising capital by selling securities to the US, which are then used to finance the Chinese military. As a measure to protect the US from the PRC’s threat posed by its military, intelligence and security apparatuses, Trump prohibited “any transaction in publicly traded securities, or any securities that are derivative of, or are designed to provide investment exposure to such securities, of any Communist Chinese military company.”

The executive order follows the Department of Defense’s list in July identifying 20 firms tied to the Chinese military, including telecommunication companies like Huawei and China Telecom. The agency updated the list with an additional 11 firms in August.

The executive order tasked the secretaries of Treasury, State and Defense and other various heads of executive agencies to carry out the order and is set to go into effect January 11, 2021.