Chinese Stocks Hit After Biden Said To Keep Trump's Investment Ban

For the past few months, one of the reasons why investors had bid up some of the Chinese mega caps is the hope that Joe Biden would undo some of the various investment bans rolled out by the Trump administration as part of ongoing trade war between the US and China. Well, that particular thesis just got hammered after a Bloomberg report that despite Biden's (both Joe and Hunter) notoriously close ties to Beijing, his administration is "likely to maintain pressure on China by preserving limits on U.S. investments in certain Chinese companies imposed under former President Donald Trump" bucking attempts from Wall Street to ease the restrictions.

Bloomberg cited "six people familiar with the matter said" although discussions on Trump’s investment bans targeting companies linked to China’s military, which included three of the country’s biggest telecommunications firms, are still ongoing and no decision has been made.

Biden, who has been trying to restore some of the ties that had gotten frayed during the previous admin but without appearing appeasing, has been navigating a fraught relationship with Beijing, as tensions flare over issues ranging from trade to human rights to military postures in the South China Sea.

The investment blacklist, which Trump announced in November when he issued a ban on US purchases or sales of securities in Chinese firms with links to China's military, touched off a new conflict, prompting China to threaten possible legal action against global firms that followed the U.S. ban. In January, Trump amended the order so that it banned altogether any Americans from holding securities of blacklisted Chinese firms from November 11th, 2021, rather than just additional purchases.

Some of the biggest losers from Trump's executive order have been Wall Street firms, who have urged Biden to completely roll back the investment ban, Bloomberg reported citing four people in the industry.

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