US Lengthens China Company Blacklist

The financial rivalry between the US and China will surprise few, especially those in trading and investment circles. The latest occurrence in the competition between two economic giants is the lengthening of the US’ Chinese company blacklist. Trump was the first to introduce the list, and it initially aimed to ban companies intertwined with China’s military. The list included 44 companies, and now there’s a significant step-up to 59.

The new goal of the list, as The president Biden, aims to limit Chinese defense and surveillance firms. There are worries about such companies undermining the security and values of the US and ally countries. As such, the firms won’t be able to get access to US capital moving towards the future. Such a move is an indicator of future attitudes, as the US maintains a strict attitude towards China.

Naturally, such a move has a significant impact on the trading and investing world. Those that hold shares in the soon-to-be banned companies are naturally among those impacted the most. The damage is somewhat mitigated by the 60-day grace period for investors. Shareholders will also have a 365-day period to divest the stocks they already own.

Luckily, the banned companies are somewhat fringe in US markets, and as such, have few holders. A portion of the firms’ stocks are in the hands of private holders, meaning there’s limited exposure among general investors. Even with the update to the blacklist, most banned companies remain restricted for investors. Among the most prominent firms on the list are Semiconductor Manufacturing Investment Corp. and China Mobile. The two were banned during the Trump administration and don’t seem to be likely to move off.

However, there is some silver lining for investors and consumers, as Xiaomi is no longer on the list. The phone manufacturer became unrestricted last month as a result of a court challenge.