Trump bans trading in the securities of 31 Chinese companies

With a new decree, US President Donald Trump is stepping up in the economic war with China. From January 11, 2021, Americans will be banned from trading in the securities of companies that also work for the People’s Liberation Army of the People’s Republic of China. The ban also applies to derivatives, including to subsidiaries, and also to indirect investments, for example through investment funds. Americans who currently hold such securities may sell them later.

The list of affected companies corresponds to the public list of 31 Chinese companies that are already affected by US sanctions and that are taboo for government contracts. Huawei, China Mobile, China Telecommunications, Panda Electronics, the surveillance technology supplier Hikvision, and other companies from the IT, aerospace, transport, energy, chemical and construction sectors stand on it. The list is kept by the US Secretary of Defense and updated on a case-by-case basis.

“These companies, although ostensibly privately owned and civil, support the military of the People’s Republic of China, its intelligence services and security forces, and assist them in their development and modernization,” writes Trump in his decree. By issuing securities, these companies would finance the development and modernization of the Chinese military, taking advantage of US investors.

While most of the affected securities are listed on Chinese stock exchanges, China Mobile and China Telecommunications are also traded on US stock exchanges. China Mobile shares lost four percent on the New York Stock Exchange on Thursday, China Telecommunications shares more than five percent. Both are also part of the MSCI Emerging Market Index. A really big slide in the price of Chinese stocks is unlikely, as US investors have only modest shares.


To home page