Biden widens list of Chinese firms off-limits for investment

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Washington: China vehemently objected Friday to President Joe Biden’s expansion of a list of Chinese companies whose shares are off-limits to US investors.

Late Thursday, the White House issued the update of to an order signed last year by his predecessor Donald Trump that aims to strengthen controls on investments in Chinese companies that the US says are linked to defence and surveillance.

Chinese Foreign Ministry spokesman Wang Wenbin urged Washington to withdraw the order and provide Chinese enterprises with a fair and non-discriminatory business and investment environment”.

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China will take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese enterprises,” he told reporters at a regular briefing in Beijing.

The executive order is the latest indication that Biden has not softened Washington’s stance on alleged security risks from companies US officials say are linked to the Chinese military and industrial complex”.

It says the aim of the revised order is to ensure that US investments are not supporting Chinese companies that undermine the security or values of the United States and our allies”.

The revised list includes companies that Washington alleges contribute to surveillance of religious and ethnic minorities or to repression and serious human rights abuses.

Many but not all of the companies on the expanded list already were on a Defence Department blacklist that limits access to American technology and investment.

Telecoms equipment maker Huawei Technologies, China’s big state-owned telecoms companies and China National Offshore Oil Corp all are on the new list of 59 companies. The earlier list included 31.

Semiconductor Manufacturing International Corp or SMIC is on the new list of banned securities investments but was not on the original list. It plays a leading role in the ruling party’s effort to reduce reliance on US and other foreign technology by creating Chinese suppliers of processor chips and other components.

The prohibitions on investments in the companies takes effect August 2. The companies are also included in the Treasury Department’s Foreign Assets Control list. The executive order signed by Trump last year required US investors to divest their stakes in the listed companies by November.

Separately, the Commerce Department has put China National Offshore Oil Corp., the country’s third-largest national oil company, on an economic blacklist for what it described as reckless and belligerent actions in the disputed waters of the South China Sea.

That’s a reference to CNOOC’s involvement in offshore drilling in disputed waters of the South China Sea, where Beijing has overlapping territorial claims with other countries including Vietnam, the Philippines, Brunei and Malaysia, as well as Taiwan.

The Commerce Department list forbids US firms from exporting or transferring technology with the companies named unless permission has been obtained from the US government. About 60 Chinese companies were added to the list in December, including drone maker DJI and semiconductor firm SMIC.

Chinese smartphone maker Xiaomi Corp, which overtook Apple Inc as the world’s No. 3 smartphone maker by sales in the third quarter of 2020, was removed from the earlier investment blacklist after it sued the US government, demanding to be removed and denying it has any links with China’s People’s Liberation Army.

Xiaomi is a Beijing-based company known for its value-for-money smartphones and smart devices.