Biden widens list of Chinese firms off-limits for investment
The Biden administration's recent decision to expand the list of Chinese firms off-limits for US investment has heightened tensions between the two countries. Read our blog to learn more.
Relations between the US and China have always been tense, but they have recently worsened during the Trump administration. Despite their disagreements on practically every subject, Democrats and Republicans are unified in their negative view of China. Their stance on China reflects the voters' opinions, as they see China as a threat to American jobs, industry, and world dominance.
When President Biden first came into power, many hoped that he would pull back on some of Trump's policies against China. However, in June, Biden's administration added an update to an order signed by Trump in 2020. The update expanded the list of Chinese companies that American investors can't buy shares from, due to their ties to the Chinese military and surveillance. The original list had 31 companies, and the Biden administration expanded it to 59 companies. The order went into effect on August 2nd, 2021.
The companies added to the list include makers of satellite equipment, integrated circuits, optical components, and satellite communications equipment and software. The order also restricted American companies from exporting or transferring technology to many of the Chinese firms on the list unless they obtained special permission from the government. Many of these Chinese companies were already on a Defense Department blacklist, which was designed to limit their access to American technology and investment.
China is a country on the rise and threatens the West's dominance. Biden believes that the West will have to work together to contain China's growing economic, political, and military influence to counter China’s growing strength. Therefore, trade will be the most visible battlefield.
Furthermore, the West accuses China of using forced technology transfers, corporate espionage, and government interference to give its homegrown companies the edge in China. At the same time, it enjoys the free markets of the West. The US and EU have therefore been strategizing and working together to take away China's unfair advantages.
Meanwhile, China has objected to the expanded list and urged Washington to withdraw the order. It wants Chinese companies to have an accessible and non-discriminatory business and investment environment.
Get Help with Export Portal
Export Portal can help SMEs identify and expand into new markets. For more information, be sure to visit our page today!
Comments 2