Biden Expands Trump-Era Ban on Investment in Chinese Firms Linked to Military

The new executive order is another case in which the Biden administration is building on a Trump-era China initiative. Mr. Biden has also kept tariffs on Chinese goods in place, as leverage in negotiations. In this case, Biden administration officials say they were acting partly to fix the executive order issued by President Donald J. Trump last November, which has been challenged, successfully, in American courts because it did not clearly lay out the factual basis for banning investments in Chinese firms linked to the defense industry.

The list of Chinese firms affected by the new order was put together by the Treasury Department, which has deep experience in issuing sanctions, rather than by the Pentagon. That is partly an effort to make clear the reasons for each companys designations, officials say, in the hope that the bans will hold up in court.

Administration officials say the number of Chinese firms targeted by the ban is likely to grow.

The order targets several giants of the Chinese telecommunications industry, some of which still operate inside the United States or partner with American companies. It is a signal that scrutiny of Chinese influence over the global technology space has not abated in Washington despite the shift to Democratic control in the White House.

Among the firms Mr. Biden listed on Thursday was Huawei, Chinas national champion in telecommunications, and the centerpiece of its effort to export 5G networks around the world. For years the Trump administration tried to marginalize the company, banning the sale of most of its technologies inside the U.S., urging allies to reject them, and attempting to starve the firms of needed chips. For a while, Mike Pompeo, the former secretary of state, and other American officials were threatening to bar allies from sharing in American intelligence briefings if they used Huawei in their networks. That backfired, but the allies have increasingly come to limit Huaweis role. Huawei is not publicly held, however, so the order would essentially ban Americans from helping to underwrite its debt offerings.

Huawei had no comment on Thursdays ban.

The order also listed three carriers China Unicom, China Telecom, and China Mobile that have been increasingly in the cross hairs of American lawmakers and regulators. In 2019, lawmakers urged the Federal Communications Commission to review China Unicoms and China Telecoms licenses to operate in the United States. The agency moved in March to consider restricting China Unicoms operations. All have been under scrutiny over whether they are diverting phone or internet traffic back to China, for the benefit of Chinese intelligence services.

China Telecom declined to comment on the new order.

In 2019, the Federal Communications Commission also blocked China Mobiles application to support calls between the United States and other countries, citing risks that the Chinese government could use its control over the company to spy on Americans calls.

But the issue is complicated by the firms ties to American companies. China Mobile has been supporting iPhones in China since 2014, a deal that was crucial to Apples growth in the Chinese market. Apple has enormous respect for China Mobile and we are excited to begin working together, Apples chief executive, Tim Cook, said in a news release. At the time, China Mobile was the worlds largest cellular network, with 763 million customers.

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