What does this hold for the citizens? Are WeChat and TikTok on the way to be on the blacklist?
The President of the United States of America has increased its restrictions on investments in certain Chinese firms by adding them to the blacklist. Most importantly, the enterprises have links to the Chinese military and surveillance technology.
Firstly, Joe Biden blacklisted U.S. stakeholders from investing financial benefits in the fifty-nine Chinese companies. Secondly, this ban continues some decisions that former President Donald Trump took with China. Some prominent companies like Aero Engine Corp. of China, Aero sun Corp., Fujian Torch Electron Technology and Huawei Technologies were also taken the blacklist. Moreover, the measures stated above will come into play at 12:01 am ET on 2nd August 2021.
Details about the Blacklist
Biden issued an executive directive to stop the USA from investing in Chinese firms. The action will help to cut the links between these companies to the Chinese government. This executive order allows the USA to stop investments in Chinese firms in a very targeted manner. In addition, the White House confirms in a press release that firms that do not accept democratic values are to be added to the blacklist.
Senior administrative staff said that the Treasury Department would reinforce and update itself on a rolling basis on the new blacklist. This will prohibit the buying or selling of public trade of securities in the target companies.
There is some revision of the earlier order by Trump. It now includes firms that engage in making and exporting surveillance technology. This is used against Muslim minorities like the Uyghurs and others in Hong Kong and China. However, this starts an ideological battle between Beijing and Washington, which the current US president, Mr Biden, has termed the struggle between autocracy and democracy.
How necessary is this blacklist?
This move is needed when China is stretching its power to spy on nearly 1.4 billion people. It uses a mix of facial recognition software, cameras, phone scanners and a range of other items. It also exports the tech to nations around the world. While it often sold info as part of communications equipment provided by companies like Huawei or as part of China’s Belt-and-Road, expanding the country’s trade.
Many say the move was justified by the American commitment not to help repression and human rights abuse.
What will China do to counter this move?
However, China has reacted to many such bans by creating its own blacklist for American companies. This leads to fears of an economic crisis between the world’s two largest traders. In addition, China will likely argue that the United States use the same tech and techniques to track terrorists and drug lords.
It is unclear how useful this order will be at halting the spread of Chinese tech. To make the blacklist truly helpful, USA needs to convince their European allies, Japan, South Korea and others, to accept the blacklist.