In response to US President Trump’s signing of an executive order at the end of last year prohibiting US investors from investing in companies owned or controlled by the Chinese military, Bloomberg reported on the 13th that this executive order, which took effect on January 11 this year, left the US financial community at a loss. Further more, the unclear content of the administrative order may have a wider market impact than expected.
It is reported that, for major US securities companies, it is unclear whether this administrative order prohibits them from providing financing for all customers around the world to invest in the aforementioned Chinese companies, or whether it is limited to US customers. Some companies believe that the ban must be complied with globally; while others believe that it can still serve non-US customers. In addition, many financial intermediaries are not sure whether to continue processing related transactions.
The report believes that this administrative order may restrict many non-US investors, increasing the selling pressure of their stocks, bonds, financial derivatives and reducing liquidity.
In response to the aforementioned administrative order, Chinese Foreign Ministry spokesperson Wang Wenbin said that the US government maliciously slandered and smeared China’s military-civilian integration development policy out of political motives, abused its national power, unreasonably suppressed Chinese companies, severely violated market competition principles and international economic and trade rules, and seriously interfered the normal economic, trade and investment cooperation between China and the United States. This move seriously damage not only the legitimate rights and interests of Chinese companies, but those of investors from all countries, including the United States itself.
