Joe Biden hasn't even been officially sworn in and China is already calling the shots.

After weeks of confusion whether US investors would be barred from investing in Chinese gigacaps, moments ago the WSJ reported that the U.S. government - under Joe Biden - is expected to let Americans continue to invest in Chinese tech giants Alibaba BABA, Tencent TCEHY, and Baidu BIDU "after weighing the firms’ alleged ties to China’s military against the potential economic impact of banning them."

Until today, the New York-listed Alibaba and Baidu, and Hong Kong-listed Tencent, were among a dozen companies being examined for inclusion in a Defense Department list of firms deemed to support China’s military, intelligence and security services, with U.S. investors having until November to divest their holdings of any firm on the list. But as a result of unknown backroom dealings, the U.S. no longer plans to add the three firms to the list. Instead, nine other Chinese companies will be added, as well as more than 100 subsidiaries of companies already on the list.

According to the WSJ, the decision caps off "a weekslong battle that pit Treasury officials, who feared widespread selloffs and economic fallout, against State Department and Pentagon officials seeking a tougher line against Beijing."

What it really caps is any debate as to who really will call the shots in the Biden admin, as capital inflows has long been a critical requirement for the Xi Jinping empirial regime, and any capital control limitations could potentially have dire consequences for China which, as part of its transformation to a fully Americanized society, is desperate to keep foreign capital coming in.

Up until Wednesday morning, many in the State Department and Pentagon believed that they had a compelling case for the companies to be included once administrative kinks were ironed out, said the people familiar with the matter.

The additions to the list will be submitted to Congress and released publicly as soon as Wednesday, the WSJ reported, citing two sources.

In kneejerk response, the ADRs of the three stocks surged as one would expect.

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