In recent weeks the administration of the outgoing US President Trump has been imposing new sanctions on China and its businesses amid a tense trade and tech war with Beijing. These actions continue to spark a further escalation of the tensions between the two nations.
Trump administration officials are considering prohibiting American entrepreneurs from investing in Alibaba Group Holding Ltd. and Tencent Holdings Ltd. because of their alleged ties to China’s military and the country’s security services, the Wall Street Journal reported Wednesday, citing sources.
According to the report, during the past several weeks, US State Department and Department of Defense officials have been in talks about the blacklist of companies that are prohibited from US investment expansion. The US announced the blacklist in November with Chinese companies in it, including those operating in the aerospace field, purportedly for their ties to the Chinese military.
The departments reportedly discussed with the Treasury Department whether adding these businesses to the list could have wide consequences for the market. As the debates continue, the measure may not go into force as a result of the discussion, according to the sources.
Tencent and Alibaba are two of the most valuable publicly listed Chinese companies, with a joint market capitalization of over $1.3 trillion, and their shares are held by scores of U.S. mutual funds and other investors.
If the companies are…