The Trump administration has stepped up an executive order barring American investors from buying securities of Chinese companies allegedly controlled by the PRC military after a disagreement among US agencies over how tough the document should be.
The Treasury Department has released guidance clarifying that President Trump’s executive order issued in November will apply to ETFs, ETFs and subsidiaries of Chinese companies that are identified as owned or controlled by the Chinese military.
Several media outlets reported that the Ministry of Finance is seeking to exclude subsidiaries of Chinese firms from the scope of the White House directive, which prohibits new purchases of securities from 35 Chinese companies from November 2021, which the White House claims have ties to the Chinese military.
Treasury officials released Monday noted that the ban applies to “any subsidiary of a Chinese communist military company after such a subsidiary is publicly registered with the Treasury.” The Ministry of Finance intends to list those companies that are 50% or more owned or controlled by a Chinese military company.
The list of designated companies currently includes 35 companies, including oil company CNOOC and China’s leading chip manufacturer Semiconductor Manufacturing International.