Even as his first term winds to a close, President Donald Trump continues to make the type of tough calls that have earned him plenty of praise from his supporters while upsetting America’s adversaries abroad.
Most recently, The Hill reported, Trump signed an executive order impacting investments in China — one that is sure to make that nation’s communist leaders furious.
“Ostensibly private and civilian”
The move came on Thursday and in the wake of a list released earlier this year by the Department of Defense that includes 31 Chinese companies tied to the country’s military.
As a result of Trump’s new order, Americans are now prohibited from investing in any of those named entities.
According to Reuters, the industries represented by these companies range from telecommunications to construction to aviation to aerospace to shipping — and beyond. Among them are some of China’s biggest businesses, including China Telecom Corp. Lt., China Mobile Ltd., and Hikvision.
The executive order includes an explanation from the Trump administration regarding why such a move is needed.
“Through the national strategy of Military-Civil Fusion, the [People’s Republic of China] increases the size of the country’s military-industrial complex by compelling civilian Chinese companies to support its military and intelligence activities,” the order states. “Those companies, though remaining ostensibly private and civilian, directly support the PRC’s military, intelligence, and security apparatuses and aid in their development and modernization.”
“Exploits United States investors”
From there, the order noted that “those companies raise capital by selling securities to United States investors that trade on public exchanges both here and abroad, lobbying United States index providers and funds to include these securities in market offerings, and engaging in other acts to ensure access to United States capital.”
As a result, the Trump administration concluded that “the PRC exploits United States investors to finance the development and modernization of its military.”
In other words, American investors in these companies have inadvertently been contributing to China’s military, which is hardly an ally of the United States these days.
The Chinese stock market saw an immediate negative impact after the announcement of the order set to go into effect on Jan. 11.
According to Business Insider, shares of China Mobile dropped by 4% and China Telecom saw an 8% decline. So far, it is unclear how China might respond.