- - Monday, May 24, 2021

Most Americans would be shocked and angered to learn that the same Chinese companies currently building weapons to threaten U.S. troops are also simultaneously raising money in U.S. financial markets. And even more disturbing, Wall Street continues to help the Chinese Communist Party access U.S. financial markets and exploit unwitting American investors.

In late 2020, President Trump became the first U.S. president to take action against China’s duplicitous use of America’s stock markets. Specifically, Mr. Trump issued an executive order that established new rules to prevent the CCP — and Wall Street — from using America’s capital markets to fund Chinese military companies.

Thankfully, the Biden administration has left this important executive action in place. And now, Wall Street is finally being forced to expel these CCP military companies from U.S. stock exchanges. Earlier this month, the New York Stock Exchange (NYSE) announced that it would follow the law established by the Trump administration and delist three massive Chinese telecom carriers: China Mobile Ltd., China Unicom Ltd. and China Telecom Corp.

All three telecom firms have been identified by the U.S. Department of Defense as “Communist Chinese military companies.” And the Defense Department specifically noted that all three are involved in China’s “Military-Civil Fusion development strategy” — a program intended to support “the modernization goals of the People’s Liberation Army (PLA).” In other words, the three carriers are actively involved in boosting the strategic capabilities of China’s military.

The Trump administration’s executive order effectively banned U.S. investment in exactly these types of Chinese companies. It was the first time that the U.S. government ever imposed capital market sanctions against the CCP.



For decades, Chinese companies — with Wall Street’s help — have been able to raise trillions of dollars of capital by selling securities to American investors on the NYSE and other exchanges around the globe. Because of the executive order, though, Americans can no longer invest in these companies anywhere in the world — including through Wall Street’s favorite loophole, exchange-traded funds.

However, a number of Chinese companies and their subsidiaries are still raising money in America’s capital markets — even as they actively support Beijing’s goal of overtaking the United States. In fact, the U.S.-China Economic and Security Review Commission (USCC) has identified 248 Chinese companies, including eight state-owned-enterprises, that are listed on America’s three largest stock exchanges — and have a combined market capitalization of $2.1 trillion.

These are Chinese companies involved in Beijing’s military, espionage, genocide and human rights violations, as well as the aggressive “Made in China 2025” industrial policy.

Last month, the Senate Foreign Relations Committee passed legislation that would require the State Department — in consultation with the Office of the Director of National Intelligence and the U.S. Treasury — to produce an independent report on the risks for U.S. national security posed by Chinese companies listed in U.S. capital markets. Such an effort could reveal exactly how Beijing exploits the U.S. financial system in order to undermine U.S. national security, industrial capacity, and America’s manufacturers. 

President Biden shouldn’t wait for the Senate bill to become law, however. To ensure that U.S. capital markets are cleared of any and all companies that support China’s aggressive long-term goals, the Biden administration should expand the Trump executive order — and make sure that it extends to all Chinese companies aiding the CCP, not just the ones directly connected to the Chinese military.

There is growing bipartisan realization in Washington that China is intent on global military, economic and high-tech dominance. Allowing Wall Street’s profits to override U.S. national and economic interests would ignore this serious threat. The Biden administration should move swiftly to ensure that China’s ruling Communist Party can no longer fund its predatory agenda with Wall Street’s help.

• Michael Stumo is CEO of the Coalition for a Prosperous America (CPA). Follow him at @michael_stumo

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