U.S. investment ban on Chinese companies is not easy to implement-C Viewpoint: Shi Yongqing-am730

U.S. investment ban on Chinese companies is not easy to implement

US President Biden signed an executive order last week prohibiting Americans from investing in Chinese companies that may be associated with the Chinese military or suspected of violating human rights. The number of companies included in the ban has increased from 48 in the Trump era to 59. The ban does not allow Americans to directly invest in the bonds and stocks of the companies involved, nor can they invest in funds containing the assets of banned Chinese companies. .

The ban was announced on June 3, and it came into effect on August 2, and there is still a one-year transition period. The specific approach is that before the ban takes effect on August 2, Americans can still buy and sell the stocks and bonds of related companies. It was not until August 2 that purchases were completely banned. However, because some Americans still hold the stocks or bonds of the company involved and did not find a suitable selling opportunity for a while, they can continue to hold these investments for one year. , And seize the opportunity to sell within this period of time. After August 2, 2022, holding such investments will be considered illegal.

In fact, the ban issued by Trump last time also contained such content. He was announced on November 12 last year and officially took effect on January 11 this year. There is also a one-year transition period, but the implementation guidelines are not clear enough, so Biden made certain amendments. For example, the new ban did not drag down all the affiliates of the company involved, leaving a lot of room for the company involved. On the other hand, the end date of the transition period was also extended from January 11, 2022 to August 20, 2022. February 2, so that the administrative agency has enough time to prepare for the implementation of the ban.

The reality is that these bans are not easy to enforce. The United States has always advocated free markets and personal privacy. Americans have the right to transfer funds to all parts of the world and make their favorite investments through foreign investment institutions. In the past, Swiss private banks used to protect the privacy of their customers and refused to hand over the information of their customers (many of whom were Americans) to the U.S. government. However, because these Swiss banks had the handle to seize by the U.S. government during the financial tsunami, if the U.S. government wants to know the account information of certain Americans, they dare not rebel. However, in this world, there are so many institutions that can invest in Americans, and it is difficult for the US government to follow up and investigate them one by one.

Although Americans are very patriotic, they will use all means to deceive the government whenever personal interests are involved. Trump said: Which American does not want to pay less tax? It’s just that he is better than the others. Not only Trump is like this, but recently even the new US Vice President He Jinli (her style is far more decent than Trump) has also been discovered, concealing her property in trust. Even the president and the vice president can do something like this. How can profit-seeking investors not dare to do it?

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Furthermore, China is the place with the strongest economic development momentum in the world, and investing in Chinese companies is a great opportunity for profit. How can fund owners miss the opportunity? In the minds of investors, they do not know how the Chinese companies included in the ban are related to the Chinese military, and it is not easy to observe how the companies involved actually violated human rights. Therefore, when they invest in Chinese companies, they should not feel too guilty. In fact, in recent years, the amount of US capital invested in mainland China through qualified institutions has increased unabated. The US government’s intimidation may not be absolutely effective.

Source: https://www.am730.com.hk/column/news/The U.S. investment ban on Chinese companies is not easy to implement -271156

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