Skip to content

New Covenant Network News

Articles For The Kingdom Age

  • Michael Fanone has low confidence Jan. 6 hearings will bring change News
  • New Reuters Survey Finds That Trust In Mainstream News Is Rapidly Declining News
  • Macleod: The End Of Fiat Is Hoving Into View… News
  • Oklahoma Lawmakers Pass Near-Total Abortion Ban News
  • Fire extinguished at Ukraine nuclear power plant, Europe’s largest – Reuters.com News
  • Biden’s continuation of Obama’s ‘fundamental transformation’ News
  • Russia pounds Ukrainian cities as advances stall, draws UN censure – Reuters News
  • White House Refuses To Deny Plans To Halt Future Civilian Ammo Sales From Lake City Plant News

US Investors Continue To Fund The Chinese Military

Posted on June 21, 2022June 21, 2022 By Tyler Durden
Spread the love

US Investors Continue To Fund The Chinese Military

Op-Ed authored by Antonio Graceffo via The Epoch Times (emphasis ours),

The U.S. Foreign Assets Control (OFAC) issued an online FAQ allowing Americans to continue funding China’s People’s Liberation Army (PLA).

American flags fly outside the New York Stock Exchange in the Financial District in New York, on Jan. 14, 2022. (Mary Altaffer/AP Photo)

The PLA is on the verge of launching its third aircraft carrier as part of its $9 billion dollar carrier program. This hefty price tag represents a small fraction of money the Chinese Communist Party (CCP) has received from U.S. investors.

China “exploits United States investors to finance the development and modernization of its military” wrote then-U.S. President Donald Trump on Nov. 12, 2020, in an executive order banning investment in Chinese stocks linked to the PLA. In the order, Trump accurately said that the key to the CCP’s military and intelligence development is the funding it receives from the U.S. private economy.

According to the U.S.-China Economic and Security Review Commission, there were 261 Chinese companies listed on U.S. exchanges with a combined value of $1.4 trillion as of March 2022.

Nina Xiang of China Money Network confirmed Trump’s statement that China depends on the United States to fund its development. The BBC also reported Xiang saying that losing access to U.S. markets would have a “devastating impact on China’s innovation ecosystem and future development.”

The pockets of U.S. investors are deep and the CCP would have difficulty covering China’s $229 billion defense budget if state-linked firms were kicked off of U.S. exchanges. The two major exchanges in New York, the NYSE and the NASDAQ, are four times the size of the combined Shanghai and Hong Kong exchanges.

In a continuation of Trump’s 2020 executive order, President Joe Biden issued an executive order this month adding 59 PLA-linked Chinese companies to the U.S. blacklist. Biden’s executive order also mandated a one-year deadline for Americans to divest themselves from the blacklisted stocks.

On June 1, just two days before the deadline, the OFAC issued an online FAQ regarding blacklisted entities, which caused a great deal of confusion.

The FAQ states: “No. E.O. 13959, as amended, does not require U.S. financial institutions to block transactions. However, transactions that would be prohibited under E.O. 13959, as amended (including an attempted sale of covered securities by a U.S. person made to effect the divestment of CMIC securities after the 365-day divestment period), must be rejected and reported to OFAC within 10 business days.”

From this statement, it is unclear if Americans must adhere to the 365-day deadline to divest themselves of blacklisted stocks.

The FAQ goes on to say, “Consistent with FAQ 863, U.S. financial institutions may continue to intermediate purchases or sales by or from non-U.S. persons to or for non-U.S. persons.” It also says that U.S. entities may continue to receive dividends from these investments.

The ambiguity of the FAQ has been understood differently by various law firms. Ropes & Gray, a global law firm, interpreted the order as meaning that U.S. investors had to divest of the blacklisted securities by June 3, although it is unclear what the penalty would be should they fail to do so.

In contrast, Norton Rose Fulbright told its clients that the deadline is no longer in force. And this seems consistent with part of the FAQ stating, “U.S. persons are not required to divest their holdings of CMIC securities during the relevant 365-day divestment period and may continue to hold such securities after the divestment period.”

Investment banks also had differing reactions to the executive orders. Morgan Stanley sold off a large number of shares in one of the blacklisted firms, Zhonghang Electronic Measuring, dropping from being the eight largest shareholder to no longer being in the top 10 as of March 31.

A DJI Mavic 2 Pro and DJi Mavic Mini made by the Chinese drone maker fly near each other in Miami, Fla, on Dec. 15, 2021. (Joe Raedle/Getty Images)

Other investment banks and investors have chosen to hold their positions, waiting and seeing how the rules and enforcement play out. However, it is apparent that many investors have decided to divest themselves of the stocks as the shares of Zhonghang and many other blacklisted firms have dropped significantly in value since last June.

While it is unclear when, if ever, Americans must divest themselves of existing shares of blacklisted firms, U.S. entities are barred from purchasing new investments in the CCP’s military-industrial complex under the executive orders. And this prohibition extends to firms working in research with applications for military, intelligence, and security.

As for divestment, Derek Scissors, a Republican appointee to the U.S.-China Economic and Security Review Commission, told Nikkei on June 7 that those who are still holding the blacklisted securities are in a wait-and-see mode.

But some investors were not in a hurry to sell shares that are losing value. Perhaps the holdouts may wind up the winners. Meanwhile, the CCP continues using U.S. money to fund its military modernization. Leading global agency for open-source defense intelligence Janes estimates that the CCP’s defense budget may actually be $58 billion more than the official number, bringing the total to $287.8 billion. And for at least the immediate future, they can rely on U.S. investors to keep footing the bill.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times or Zero Hedge.

Tyler Durden
Tue, 06/21/2022 – 23:00
Source: Zero Hedge News

 9 total views,  2 views today

News

Post navigation

Previous Post: The State Of Global War (And Peace)
Next Post: Mapping The Migration Of The World's Millionaires

Related Posts

  • Lawmakers Want Costs on Putin; Sen. Graham: 'Make This Personal' News
  • Fauci Flashback: “The Most Potent Vaccination Is Getting Infected Yourself” News
  • Masked Singer 2022 LIVE – Ram is ELIMINATED & revealed to be Joe Buck as Firefly storms off stage after shocking results News
  • In between churches … where do you tithe? News
  • Are Russian Oligarchs Fleeing By Sea To Indian Ocean As Biden Aims To Seize Billions? News
  • Progressive Rep. Tlaib Lines Up to Rebut Biden's State of the Union News

Help Keep NCN Going – Could You Spare $5.00?

THIS WEEK'S 10 MOST READ ARTICLES

  • Flurry Of Calls Among Saudi Diplo Staff And Spy Coincided With 9/11 Hijackers' Arrival 3 views per day
  • Mike Pompeo — Who Riled China While in Office — to Visit Taiwan 2 views per day
  • D.C. giving out monkeypox vaccines to residents but the supply is limited 2 views per day
  • Liberal groups restart court-packing push following Supreme Court abortion decision 2 views per day
  • Icebergify: What is the Spotify iceberg music trend? 2 views per day
  • Louisiana and Utah trigger laws banning abortions temporarily blocked by courts – NBC News 2 views per day
  • FDA official: New-look COVID-19 booster campaign could start in October 2 views per day
  • Petaflops abound at NOAA, bringing better weather forecasts 2 views per day
  • 28 Jun 2022 2 views per day
  • The soul of our nation has been restored 2 views per day

Our Authors & Blogs

Visit Our Sister Site

Visit Live By Truth for classic New Covenant Podcasts

Visit Preterist Archives

Preterist Archives

Visit This Site

On Demand

Recent Posts

  • The Biden Administration Hits Peak Energy Absurdity
  • West Coast Rail Networks Clogged As Supply Chain Normalization Delayed
  • Army awards contract for new light tank to General Dynamics
  • White House rolls out monkeypox strategy with testing, 300,000 vaccine shots for at-risk populations
  • Wait a minute! 'Nothing changes' in N.Y. gun ownership?
  • How The Qualities Of Bitcoin Baffle Nocoiners
  • Just say no Joe
  • Extend federal child tax credit, cut hunger, says evangelical Christian leader
  • Philippines' Marcos set to toe careful line between U.S. and China
  • Citadel Pays $363 Million For New Miami Headquarters Land Purchase

Archives

  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • May 2019

Categories

  • Bible Prophecy Questions
  • Christian Blog
  • Christian/Secular news
  • Congress
  • Doomsday News
  • Health
  • iTunes
  • Mel Gibson
  • News
  • Opinion
  • The Other Journal
  • Uncategorized
  • Video
  • Worthy News

Help Us Continue

  • Reuters Poll: Americans Consider Fewer Nights Out as Rising Gasoline Prices Bite News
  • US Natgas Prices Sink After Goldman Says Prices “Likely Overshot”  News
  • Turkey Lays Out Demands Over Finland, Sweden's "Outrageous" NATO Bids News
  • Trump: America Never Felt 'So Low, So Dejected' News
  • Biden eyeing moves to cut nicotine in cigarettes: Report Opinion
  • Leftists Want To Control Your Money So They Can Control You News
  • Bill Gates funnels $1 million to push ‘math is racist’ narrative News
  • New York’s lawsuit against NRA can move forward, judge rules Opinion

Copyright © 2022 New Covenant Network News.

Powered by PressBook News WordPress theme