Yesterday, the White House unveiled a new executive order banning investment in Chinese companies supposedly linked to the PLA, in U.S. capital markets. The move is designed to deter U.S. investment firms, pension funds and others from buying shares of 31 Chinese companies that were designated by the Defense Department as backed by the Chinese military earlier this year. Starting Jan. 11, 2021, the order will prohibit purchases by U.S. investors of the securities of those companies. “China is increasingly exploiting United States capital to resource and to enable the development and modernization of its military, intelligence, and other security apparatuses,” said the order released by the White House.
White House trade adviser Peter Navarro estimated that at least half a trillion dollars in market capitalization was represented by the Chinese companies and their subsidiaries. “This is a sweeping order designed to choke off American capital to China’s militarization,” he claimed during a conference call with reporters.
