Biden maintains and expands the measures against China spearheaded by his predecessor.

The U.S. president decided to ban American investments in dozens of Chinese technology and defense companies with alleged military ties.

The new executive order, announced by the White House this week, takes effect on August 2 and will affect 59 firms from the Asian country, including the giant Huawei and the nation’s three largest telecommunications companies.

It is an expansion of the order previously signed by his predecessor, Donald Trump, who pushed for a tougher stance toward China and led some experts to warn of a “new cold war.”

Even before the White House’s official announcement, China suggested it would take action in response and condemned the measure.

What the order entails

The decree broadens the scope of another executive order signed last November by former President Trump, which banned U.S. investments in some thirty Chinese companies for allegedly supporting the efforts of Beijing’s intelligence, military and security apparatus.

The goal of the ban is to ensure that U.S. investments “do not support China’s defense sector,” the Biden White House explained.

“The prohibitions are intentionally targeted to maximize impact while minimizing harm to global markets,” U.S. officials added.

It also seeks to prevent benefits from flowing to companies whose surveillance technologies “contribute, both inside and outside China, to the surveillance of religious or ethnic minorities, or facilitate repression and serious human rights abuses,” it added.

The measure comes amid serious allegations of human rights violations by China against the Uyghurs in the Xinjiang region, where the surveillance used on this group is under scrutiny.

The Biden administration has also accused Beijing of acting more aggressively abroad and stepping up repression at home.

Several Chinese companies included on the list have deemed Washington’s accusations “unfounded.“

In fact, Xiaomi, one of the world’s leading mobile phone manufacturers and Huawei’s main competitor in the Chinese market, filed a lawsuit in U.S. federal court and won, forcing the U.S. government to remove it from its blacklist.

The current list, however, includes the Asian giant’s three largest telecommunications companies: China Mobile, China Unicom and China Telecom.

Huawei, another of the biggest companies affected, recently said the sanctions imposed by the United States in 2019 had a major impact on its mobile phone business.

The White House also plans to expand the list on a regular basis, and will give U.S. investors one year to divest their holdings in those firms.

China’s response

Beijing condemned the decision on Friday and denounced that the United States “has unscrupulously suppressed and restricted Chinese companies.”

The spokesman for the Asian country’s Ministry of Foreign Affairs, Wang Wenbin, expressed China’s “firm opposition” to the order, which he said harms “not only the legitimate rights and interests of Chinese companies, but also those of global investors, including American ones.”

“Biden’s blacklisting of 59 firms under a modified Trump order ‘will only amount to lifting a stone that will fall on its own feet,’ according to experts,” headlined the nationalist daily Global Times, calling it the “broadest” order against China since the Democrat took office.

In the article, the state-run newspaper quoted opinions from experts in the country warning that the growing technology war between China and the U.S. “will not change under the Biden administration” and that the new president is leading a “more comprehensive and deeper strategy” to compete with Beijing.

The measure comes after the two powers resumed trade negotiations by phone.

In their first “meeting” under the Biden presidency last month, representatives of both countries held talks aimed at “developing bilateral trade,” which has been stalled since 2018 due to the trade war launched by Trump.

“Both sides held candid, pragmatic and constructive exchanges with an attitude of equality and mutual respect,” China’s Ministry of Commerce reported.

However, Biden has insisted that the existing tariffs will remain in place for now, as he seeks to boost the U.S. economy, severely hit at the start of the pandemic but now in the process of recovery.

Source: BBC Mundo