Latest US sanctions on China shake China Mobile, China Telecom

President Donald Trump may have lost the election, but he is showing no signs of relenting when it comes to China. The latest executive order signed by President Trump will see US companies restricted from investing in Chinese firms owned or controlled by the military.

The order, signed today, said that China is using US money to fund the “the development and modernisation of its military, intelligence, and other security apparatuses”, in turn posing a threat to the US itself.

Back in June, the Pentagon identified 20 Chinese companies with ties to the military, while 11 further were added in August. Investment in all 31 of these companies will be prohibited. 

Included in this list are two of China’s biggest telecoms players, China Mobile and China Telecom, whose shares sunk enormously (5% and 7.8%, respectively) upon news of the order.

“This not only severely harms the legitimate rights and interests of Chinese companies, but also the interests of foreign investors including US ones,” said Chinese foreign ministry spokesperson Wang Wenbin. 

The sanctions are due to take effect on January the 11th and orders US investment firms and pension funds to divest their holdings in the listed companies over the next year. If additional companies are added to this list at a later date, US companies will only have 60 days to divest. 

For some time now, China has been threatening its own ‘entity list’ to rival that of the US, which would place severe sanctions of US firms operating in China. However, no specific companies have thus far been revealed, leading many to speculate that the Chinese government would wait until the outcome of the US elections before making a final decision. Now, it seems they will wait until Trump’s presidency comes to a close, hoping to ride out the storm until Joe Biden can take office.

The sanctions come at a time of high tension between China and the West, with China disqualifying a wave of pro-democracy Hong Kong lawmakers in a move that may draw sanctions from the UK and others. 

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