US expands ban on investment in Chinese companies to cover surveillance sector

The US government expanded the ban on Americans investing in Chinese companies with purported ties to China’s military to cover companies in the surveillance technology sector, an executive order stated. The blacklist now includes 59 Chinese companies, up from the 48 banned by the previous administration last November.

The new sanctions go into effect on August 2 and Americans already invested in the blacklisted firms, either directly or through other funds, must divest themselves within a year. The US government has also indicated that additional companies may be added to the list in the coming months.

Aimed at surveillance technology firms

Many of the newly banned companies are affiliates or subsidiaries of major state-owned companies or businesses named on the earlier blacklist. While the previous list targetted “Communist Chinese military companies,” the new list targets companies in the defense and related materiel sector and “Chinese surveillance technology firms that contribute — both inside and outside China — to the surveillance of religious or ethnic minorities or otherwise facilitate repression and serious human rights abuses, a fact-sheet released by the White House stated. This includes companies that build tools used against Muslim minorities like the Uyghurs and dissidents in Hong Kong.

Last December, it was revealed that Huawei worked on a facial recognition system to snoop on people from China’s Uighur community, which also had a “Uighur alarm” — to detect a person’s ethnicity and alert authorities upon spotting a person from the Uighur community.

“The move comes at a moment when China is both ramping up its ability to spy on its nearly 1.4 billion people, using a mix of facial-recognition cameras and software, phone-scanners and a range of other tools, and exporting that technology to nations around the world” – The New York Times

The list carries forward many of the names from the previous list including Huawei, HikVision, China Mobile, China Telecommunications. and China Unicom. The new order, however, does not cover technology companies like WeChat and TikTok, which are subject to a different executive order issued by the previous administration and are currently placed on hold.

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Treasury Department to take charge

Unlike the old blacklist, which was managed by the Defense Department, the new list will be managed by the Treasury Department, which already oversees many of the economic sanctions the US has imposed. According to White House officials, this move should help avoid many of the legal challenges that the previous administration faced and provide “a solid legal foundation” to the ban, The Wall Street Journal reported.

Undermines lawful rights and interests of Chinese companies: China

The ban from the previous administration “not only undermined the lawful rights and interests of Chinese companies, but also hurt the interests of global investors including those in the US,” a Chinese foreign ministry spokesman told reporters in Beijing. “The U.S. should respect the rule of law and the market, correct its mistakes, and stop actions that undermine the global financial market order and investors’ lawful rights and interests,” he added.

Complete list of banned companies

1. Aero Engine Corporation Of China
2. Aerospace Ch Uav Co., Ltd
3. Aerospace Communications Holdings Group Company Limited
4. Aerosun Corporation
5. Anhui Greatwall Military Industry Company Limited
6. Aviation Industry Corporation Of China, Ltd.
7. Avic Aviation High-Technology Company Limited
8. Avic Heavy Machinery Company Limited
9. Avic Jonhon Optronic Technology Co., Ltd.
10. Avic Shenyang Aircraft Company Limited
11. Avic Xi’an Aircraft Industry Group Company Ltd.
12. Changsha Jingjia Microelectronics Company Limited
13. China Academy Of Launch Vehicle Technology
14. China Aerospace Science And Industry Corporation Limited
15. China Aerospace Science And Technology Corporation
16. China Aerospace Times Electronics Co., Ltd
17. China Avionics Systems Company Limited
18. China Communications Construction Company Limited
19. China Communications Construction Group (Limited)
20. China Electronics Corporation
21. China Electronics Technology Group Corporation
22. China General Nuclear Power Corporation
23. China Marine Information Electronics Company Limited
24. China Mobile Communications Group Co., Ltd.
25. China Mobile Limited
26. China National Nuclear Corporation
27. China National Offshore Oil Corporation
28. China North Industries Group Corporation Limited
29. China Nuclear Engineering Corporation Limited
30. China Railway Construction Corporation Limited
31. China Satellite Communications Co., Ltd.
32. China Shipbuilding Industry Company Limited
33. China Shipbuilding Industry Group Power Company Limited
34. China South Industries Group Corporation
35. China Spacesat Co., Ltd.
36. China State Shipbuilding Corporation Limited
37. China Telecom Corporation Limited
38. China Telecommunications Corporation
39. China Unicom (Hong Kong) Limited
40. China United Network Communications Group Co., Ltd.
41. Cnooc Limited
42. Costar Group Co., Ltd.
43. Cssc Offshore & Marine Engineering (Group) Company Limited
44. Fujian Torch Electron Technology Co., Ltd.
45. Guizhou Space Appliance Co., Ltd
46. Hangzhou Hikvision Digital Technology Co., Ltd.
47. Huawei Investment & Holding Co., Ltd.
48. Huawei Technologies Co., Ltd.
49. Inner Mongolia First Machinery Group Co., Ltd.
50. Inspur Group Co., Ltd.
51. Jiangxi Hongdu Aviation Industry Co., Ltd.
52. Nanjing Panda Electronics Company Limited
53. North Navigation Control Technology Co., Ltd.
54. Panda Electronics Group Co., Ltd.
55. Proven Glory Capital Limited
56. Proven Honour Capital Limited
57. Semiconductor Manufacturing International Corporation
58. Shaanxi Zhongtian Rocket Technology Company Limited
59. Zhonghang Electronic Measuring Instruments Company Limited

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