US delays China investment ban as Biden team aims to clarify policy scope
- Treasury Department says US investors are allowed to trade securities in subsidiaries of Chinese companies that are on a blacklist until June 11
- A Biden administration review will look at whether the policies against Chinese companies should be reworked, or even revoked
In an announcement on Tuesday, the Treasury Department said US investors were allowed to trade securities in subsidiaries of Chinese companies that were on a blacklist until June 11.
The Biden administration review will look at whether the policies against Chinese companies should be reworked, or even revoked.
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A specific issue with this November executive order was that it was unclear whether any subsidiary or companies with names similar to the blacklisted firms were also included in the ban. Confusion quickly set in on Wall Street as the order did not clearly specify the scope of the companies covered.
The Treasury said all transactions with subsidiaries of four companies – China National Offshore Oil Corp (CNOOC), China Mobile, China Telecom and China Unicom (Hong Kong) – were not authorised.
In January, the New York Stock Exchange, which was home to a handful of blacklisted Chinese companies including three telecoms carriers, made two reversals within two days in its delisting decisions of the trio.
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Immediately after Biden took office, Chinese companies including Xiaomi, Luokung Technology, and Huawei filed lawsuits, saying the claimed military associations were unfounded.
Three Chinese telecommunications carriers appealed the stock exchange for a review to reconsider its decision.
The telecoms companies stressed that they have complied “with the laws and regulations, market rules as well as regulatory requirements”.
In contrast, Xiaomi and Luokung both won court battles to be exempted from sanctions.
