Shares Of CNOOC Ltd Had Fallen Nearly 14% After Sunday’s Report, And Tumbled 3.9% By Friday’s Market Close
SMIC, which relies heavily on equipment from US suppliers, was already in Washington’s crosshairs.
In September, the US Commerce Department informed some firms they needed to obtain a license before supplying goods and services to SMIC after concluding there was an “unacceptable risk” that equipment supplied to it could be used for military purposes.
The expanded blacklist is seen as part of a bid to cement Trump’s tough-on-China legacy and to box Biden, the Democratic president-elect who takes office on Jan. 20, into hardline positions on Beijing amid bipartisan anti-China sentiment in Congress.
The measure is also part of a broader effort by Washington to target what it sees as Beijing’s efforts to enlist corporations to harness emerging civilian technologies for military purposes.
The list of “Communist Chinese Military Companies” was mandated by a 1999 law requiring the Pentagon to compile a catalog of companies “owned or controlled” by the People’s Liberation Army, but the DOD only compiled it in 2020.
Giants like Hikvision, China Telecom and China Mobile were added this year.
In November, the White House published an executive order, first reported by Reuters, that sought to give teeth to the list by barring US investors from buying securities of the firms, from November 2021.
Top USasset managers Vanguard Group and BlackRock Inc each own about 1 per cent of shares of CNOOC’s listed unit CNOOC Ltd, and together own roughly 4 per cent of outstanding shares of SMIC, disclosures show.
Congress and the Trump administration have sought increasingly to curb the US market access of Chinese companies that do not comply with rules faced by American rivals, even if that means antagonizing Wall Street.
On Wednesday, the US House of Representatives passed a law to kick Chinese companies off US stock exchanges if they do not fully comply with the country’s auditing rules, giving Trump one more tool to threaten Beijing with before leaving office. https://telecom.economictimes.indiatimes.com
