China urges US to stop cracking down on Chinese enterprises by abusing its power

Source: Global Times Published: 2020/11/16 11:33:40

The Ministry of Commerce (MOFCOM) Photo: VCG

China urges the US to stop its unreasonable crackdown on Chinese companies, said spokesperson of the Ministry of Commerce (MOFCOM) on Monday, responding to a recent US ban on 31 Chinese companies.

US president Donald Trump issued an executive order on Thursday prohibiting Americans from investing in companies, or individuals from owning shares, in any of the 31 Chinese companies claimed to be owned or controlled by the Chinese military.

The US has repeatedly touted 'reasons of national security' and abused its power to suppress Chinese firms, seriously violating the principles of market competition and international trade rules it claims to care so much about, said Gao Feng, spokesman of MOFCOM.

Ding Meng, an economist at the Bank of China (Hong Kong), said that the ban is aimed at investment rather than business operations. It will not therefore affect the business activities of Chinese enterprises, but will have a negative impact on the company's stock price and subsequent financing costs.

"The ban may also involve the fact that if the above-mentioned company is a constituent stock of the index fund, after US investors become unable to invest, the adjustment of index stocks, such as MSCI, will be affected," Ding told the Global Times on Monday.

In the era of globalization, the interests of all countries are deeply intertwined. In recent years, China's domestic market has been increasingly favored by global investors, including the US, which reflects the confidence of international investors in China's stable economic development and the recognition of the deepening reform and opening up of China's domestic market, according to Gao.

The latest statistics showed that from January to October, foreign investment into the Chinese mainland reached 800.68 billion yuan, up 6.4 percent year-on-year, equivalent to $115.09 billion, up 3.9 percent from last year.

MOFCOM also said that Chinese enterprises always adhere to the laws and regulations and strictly abide by the laws and regulations of relevant countries. Chinese companies will continue to conduct mutually beneficial cooperation with other countries on the basis of respecting market rules and relevant laws.

"Disregarding the facts, the US considers these Chinese enterprises as being military-controlled, not warranted and not based on law, which China is firmly opposed to. China urges the US side to stop its unreasonable crackdown on Chinese companies and provide a fair, just and non-discriminatory environment for Chinese companies to conduct normal business in the US," said Gao.

The US is apt to use 'national security' as a pretext for artificially blocking American investors' access to the Chinese market, or even politicizing it, which is not in line with economic laws and will only cause companies to miss opportunities for development and harm the interests of investors. Market forces cannot be suppressed by the actions of a few politicians, added MOFCOM.

Posted in: ECONOMY

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