"The United States is ignoring the facts," said the Chinese Ministry of Commerce in a statement on Monday in response to President Trump's attempt to ban Chinese stocks the administration says are linked to the Chinese military and therefore represent national security concerns.
Last week, Trump targeted Chinese stocks again, issuing yet another executive order-and order that sent Chinese telecommunications giants crashing. The order, which seeks to limit American investments in companies that supply and support the Chinese military, blocks trade in securities of 31 Chinese companies deemed by the Defense Department as backers of the nation’s military earlier in 2020.
“The People’s Republic of China (PRC) is increasingly exploiting United States capital to resource and to enable the development and modernization of its military, intelligence, and other security apparatuses, which continues to allow the PRC to directly threaten the United States homeland and United States forces overseas,” Trumps said in his order.
The move sent share prices in China Telecom, (NYSE: CHA), China Mobile Ltd. (NYSE: CHL), and China Unicom (NYSE: CHU) to shares fall 7%, 4,% and 6% respectively.
Today, China fought back:
"The Chinese side has repeatedly expressed its clear position regarding the unfounded pressure exerted by the United States on Chinese companies. The United States is ignoring the facts. Recognizing certain Chinese companies as controlled by the military does not have any evidence behind it and does not correspond to the legal theory. The Chinese side is strongly opposed to this," the statement read.
Accusing the U.S. of grave violations of its own historical principles of market competition
The Chinese Commerce Ministry called for the U.S. to "stop the unreasonable pressure on Chinese companies and create a fair and non-discriminatory environment."
January 11, 2021
Trump's executive order will go into effect on January 11, just 9 days before Joe Biden (short of a Trumo coup), will be sworn in as the new U.S. President. Biden can summarily negatve Trump's order which, along with so many of Trump's executive orders during his tenure, is to be expected. However, national security concerns in the cold war between the U.S. and China will persist well into Biden's presidency, and likely beyond. What road Biden will take precisey and what it will mean for investors of U.S.-listed Chinese stocks—especially ones determined to be linked to the Chinese military—remains to be seen. One thing is for sure: Investors will be watching to see how this all plays out with bated breath.