Trump bans Americans from investing in Chinese companies he says have military ties

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The ordinance applies to 31 Chinese companies which it claims “enable the development and modernization” of the Chinese military and “directly threaten” US security.

Smartphone maker Huawei and Hikvision, one of the world’s largest manufacturers and suppliers of video surveillance equipment, are among the companies on the blacklist. Some of the other listed companies, including China Telecom and China Mobile, are listed on the New York Stock Exchange.

Trump’s order prohibits U.S. investors from owning or trading in securities that originate from or are exposed to these companies. This includes pension funds or the holding of shares in companies which are prohibited. Investors will have until November 2021 to divest from companies.

Hikvision shares fell more than 4% in morning trading in Shenzhen on Friday, before cutting some of those losses to drop 1.5%. Shares in China Telecom (NO) dipped 7.8% and China Mobile (CHL) was down 5% in Hong Kong. Huawei is a private company.

Hikvision said Friday the decision to sue the company was “without merit.”

“As we have shown time and time again, Hikvision is not a ‘Chinese military company’. Hikvision is independently managed and publicly traded,” the company said in a statement.

Hikvision added that she had never been involved in any research and development work for military applications.

“These punitive actions against society do not make America or the world a safer place,” the company said.

Huawei, China Telecom and China Mobile did not immediately respond to a request for comment.

A spokesperson for the Chinese Foreign Ministry on Friday denounced the decree, saying the US government “maliciously slanders” legitimate collaboration between Chinese military and civilian companies and “unreasonably suppresses Chinese companies.”

“This move will not only seriously harm the legitimate interests of Chinese companies, but also the interests of investors in various countries, including the United States,” spokesman Wang Wenbin told reporters.

The decree, which is due to go into effect on Jan. 11, comes as commercial and technological battles intensify between the world’s two largest economies.

Many Chinese tech companies have come under pressure under the Trump administration. In recent years, Washington has targeted China’s lofty technological ambitions, hitting developing industries of artificial intelligence, semiconductors, and telecommunications.

Trump’s latest move is in line with what industry watchers such as Paul Triolo, head of geotechnology at Eurasia Group, expected of the lame presidency.

Beijing “will ensure that the Trump administration takes tough separation measures against China, especially actions against major Chinese tech companies,” Triolo wrote in a note last week.

“But China will generally remain restrained in its retaliatory measures so as not to poison relations before [US president-elect Joe] Biden takes office on January 20, “he added.

Earlier this year, officials in Washington stepped up sanctions against national tech champion Huawei, citing national security concerns. U.S. restrictions – which further prevent Huawei from accessing vital U.S. technology and supplies – have pushed the smartphone and telecommunications equipment maker into survival mode. Huawei has repeatedly said that its products do not pose a risk to national security.

Hikvision was also added to a US trade list banning access to US supplies late last year. The company had been convicted of working with authorities in Xinjiang, accused of alleged human rights violations against Uyghurs and other members of Muslim minority groups.

Correction: An earlier version of this story misspelled Hikvision.

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