The Treasury Department published guidance clarifying that the executive order, released in November, would apply to investors in exchange-traded funds and index funds as well as subsidiaries of Chinese companies designated as owned or controlled by the Chinese military. "This should allay concerns that U.S. investors might unknowingly support (Chinese military-controlled companies) via direct, indirect, or other passive investments," he added. Specifically, some media outlets reported that Treasury was seeking to exclude Chinese companies' subsidiaries from the scope of the White House directive, which bars new purchases of securities of 35 Chinese companies that Washington alleges are backed by the Chinese military, starting in November 2021. It added that the agency "intends to list" publiclytraded entities that are 50 percent or more owned by a Chinese military company or controlled by one. The November executive order sought to give teeth to a 1999 law that mandated that the Department of Defense compile a list of Chinese military companies.

Source: The Standard December 29, 2020 02:37 UTC