A latest report from
the United States revealed that nearly 70 percent of the Chinese companies with
ties of Chinese military have affiliates whose securities are supposedly
included in major stock indices.
The report
further claims that these companies are indirectly using the money from the US
investors in production of civilian and military. Just earlier this month, the
state department said, “The Chinese Communist Party's threat to American
national security extends into our financial markets and impacts American
investors.”
A report in the
South China Morning Post quited the State Department report and confirmed that
during the first quarter of this year out of 31 firms with Chinese military
ties had at least 68 distinct affiliated companies and the shares of these
countries were also included on major benchmarks.
Giving out
further details about the Chinese firms, the State Department revealed that
among the 22 firms, who have affiliates, China National Chemical Corporation
and China Communications Constructions Company. These were included in the MSCI
Emerging Markets Index, FTSE
Emerging Index and Bloomberg Barclays Global Aggregate Index.
This is after the American President Donald Trump had
signed an executive order on November 12 which essentially prohibits the
American industrialists from investing in these firms from January 11, 2021.
Earlier this month, the US had also blocked five more
chinese companies which included a top chip maker and an oil giant.
Relations between China and the US have seen a huge blow
after the pandemic started as Trump had time and again blamed China for
Coronavirus that hampered the economies all around the world. Earlier too,
China was upset over America’s attitude towards its 5G technology from China
based tech giant Huawei.
Experts suggested that if Trump gets another term as the
President of the US, the two most successful economies of the world may go into
a full blown trade war, which would affect all the nations allied to them.
The two countries are
displaying their power potential and in the bid to do this, they are
continuously testing the boundaries of each other. Recently, China made an
effort to better its relations with the Biden administration, after their electoral
college win so that these blockades come to an end and the Chinese companies
get an opening in the US market
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