Already in its waning days, the Trump administration's decision to ban investments will further increase America's tensions with China.
Counting its final days in power, the Donald Trump administration on Thursday took another swipe at Beijing and added nine more Chinese firms to a blacklist of alleged Chinese military companies, including planemaker Comac and mobile phone maker Xiaomi.
The companies will be subject to a new US investment ban which forces American investors to divest their holdings of the blacklisted firms by Nov 11, 2021.
Already in its waning days, the Trump administration's decision to ban investments will further increase America's tensions with China, which is its strategic rival in Asia.
The expanding blacklist is part of a bid by President Donald Trump to cement his tough-on-China legacy in the waning days of his presidency.
It was mandated by a 1999 law requiring the Defense Department to compile a catalogue of companies owned or controlled by the Chinese military. The Pentagon, which only began complying this year, has so far added 35 companies, including oil giant CNOOC and China's top chipmaker SMIC.
In November, Trump sought to give the law teeth by signing an executive order banning US investment of the blacklisted firms.
Executives of state-owned enterprises, officials of the Chinese Communist Party and military, along with oil giant CNOOC will face new restrictions for allegedly using coercion against states with rival South China Sea claims.
Shares in Xiaomi slumped over 8% in early Friday trading, against a 0.2% drop in the Hang Seng index, while CNOOC Ltd shares rose around 1%.
In its response, the Chinese embassy referred to Jan. 7 Foreign Ministry comments accusing Washington of "pinning political and ideological labels on economic and trade issues and exploiting its state power to crack down on foreign companies, under the pretext of national security."
The United States has long opposed China's extensive territorial claims in the South China Sea, a potentially resource-rich area that is also a strategic trade route.
(With Reuters inputs)
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