MERICS China Essentials
13 min read

China's toolkit against sanctions + Shaping global narratives + Three-child policy

TOP STORY: China fights back against Western sanctions and blacklists

The United States and China took steps in the first days of June to extend the legal foundations of what is now an ever more formalized relationship of mutual mistrust. On June 3, US President Joe Biden signed an executive order that bars US investors from putting their money into stocks and bonds of 59 Chinese companies linked to the PRC’s “military-industrial complex” and its surveillance technology sector. The ban, effective on August 2, replaces and strengthens the Trump administration’s measures aimed at preventing US investments from supporting Chinese companies that undermine US security and values. 

In addition to targeting a longer list of firms, many of which are subsidiaries of state-owned defense companies, the investment ban identifies the use of surveillance tech for domestic repression and human rights abuses in China as posing a threat to the United States. The E.O. also clarifies that the US Treasury, not the Department of Defense, will drive future designations.  

These are only the latest in a long series of trade and investment restrictions targeting Chinese firms and technology as the strategic rivalry between the two countries continues to intensify. The US Senate further passed legislation on Tuesday to provide more than USD 250 billion in support for the US tech industry to counter China’s ascendency in a number of key technology fields. China’s Foreign Ministry said the bill, known as the Innovation and Competition Act, displayed a Cold War mentality.