The Biden administration postponed the implementation of Trump's investment ban on Chinese military enterprises https://t.co/OuEEQKtZJX pic.twitter.com/wqLSnG6D7a
— RFI Chinese-Radio France International (@RFI_Cn)
Reuters published an article entitled "The United States Postpones the Effective Date of the Investment Ban on Chinese Military Enterprises" on February 2.
The analysis article that makes US investors at a loss" revealed that the Biden administration has postponed the effective date of Trump’s investment ban on Chinese military enterprises from January 1 to May 28...
The article said that the Biden administration stated last Wednesday that most investments in companies with "names similar to but not identical to military industrial enterprises" are permitted before May 5," and "will be originally scheduled for January 27. The deadline of the day is postponed. "
Among the 44 companies currently on the ban list, at least 10 companies' affiliates have issued USD bonds, including Huawei, SMIC, Sinochem and China Aviation Industry Corporation.
The news did not say exactly whether the 44 companies mentioned above were within the scope of the Biden administration "postponing the original deadline of January 1."
The Trump administration issued a decree in November last year prohibiting Americans from investing in companies that the U.S. Department of Defense believes are related to the Chinese military.Many Chinese-funded companies have denied any connection with the military, and the Chinese government has also stated that the U.S. statement lacks basis.
After the order was issued, a series of amendments and explanations were carried out, which took a hit on Chinese stocks and bonds because it was not easy for investors to figure out which securities might be affected.
Listed stocks were quickly removed from US exchanges and global indexes.Bond investors struggle to distinguish the securities offered by companies with "slightly different" names, "abbreviations" or "similar names."
Reuters said that although the move provided breathing space, it did not solve the problem.The analysis quoted Paul, head of Asia Pacific corporate debt business at Aberdeen Standards Investment
Lukaszewski said, "We are now in wait-and-see mode until we have a clear understanding of what the new government will do."
According to JPMorgan Chase's estimates (the ban on investment in Chinese military companies), restrictions on US investors and US citizens may affect nearly $600 billion worth of bonds.
The large number of bonds issued by Chinese companies provides investors with buying opportunities outside the fixed income markets in developed countries where yields are generally ultra-low.
After Trump issued an executive order, these Chinese bonds fell and the bid-offer spread widened, but some of them have since recovered.
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