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The US government should let Americans continue to invest in Chinese tech giants Alibaba Group Holding Ltd., Tencent Holdings Ltd. and Baidu Inc., after weighing the companies’ alleged ties to the Chinese military against the potential economic impact of their ban.
New York-listed Alibaba and Baidu and Hong Kong-listed Tencent were among a dozen companies screened for inclusion in a Department of Defense list of companies deemed to support military, intelligence, and security services from China, according to people familiar with the matter. U.S. investors have until November to dispose of their holdings in any company on the list.
The United States no longer plans to add the three companies to the list. Nine more Chinese companies will be added, as well as more than 100 subsidiaries of companies already on the list, the sources said.
The move ends a week-long battle between Treasury officials, who feared massive sales and economic fallout, with State Department and Pentagon officials seeking a harder line against Beijing. Until Wednesday morning, many members of the State Department and the Pentagon believed they had a compelling case for including businesses once administrative issues were resolved, people familiar with the matter said.
In the end, Treasury Secretary Steven Mnuchin prevailed.
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