The Trump administration unleashed new sanctions on companies that contribute to China's military-industrial base, the White House announced Thursday.
The executive order will prohibit Americans from owning shares of 31 companies that support the industrial, communications, and technological capabilities of China's People's Liberation Army. Pentagon officials designated the firms as "Communist Chinese military companies" in June and August memos, according to the Wall Street Journal.
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The targeted companies have enjoyed the support of American investors—many of the sanctioned firms are traded on Chinese stock exchanges, and two of them are listed on the New York Stock Exchange. Even if the latest sanctions are reversed by a Biden administration next year, investment experts believe the White House's order could deter further American investment in Chinese companies.
Sen. Marco Rubio (R., Fla.), a prominent China critic in Congress, welcomed the White House's move. "The Chinese Communist Party's exploitation of U.S. capital markets is a clear and ongoing risk to U.S. economic and national security," Rubio told the New York Times on Thursday. "Today's action also lays down a clear marker for U.S. policy going forward—we can never put the interests of the Chinese Communist Party and Wall Street above American workers and mom-and-pop investors."
White House trade czar and China hawk Peter Navarro also applauded the decision as a strike against the Chinese military. "American capital should not be used to finance the construction of Chinese Communist weapons literally aimed at killing Americans and driving the U.S. military out of Asia," Navarro said. "This strong action by President Trump puts a stop to that Wall Street insanity."
The sanctions are only the latest move in a larger effort to divorce American institutions from financial and information networks that strengthen the Chinese Communist Party. In an interview this summer with the Washington Free Beacon, Undersecretary of State Keith Krach outlined the State Department's strategy to combat Chinese influence from college campuses to Wall Street. Through a series of "clean" initiatives, the federal government has worked to eliminate Chinese technology and influence in American private enterprise.