But the move nonetheless signaled that Biden would continue Trump’s aggressive approach of leveraging U.S. financial markets to counter China.
“We see this is as one action in the sort of broader sweep of steps we are taking to strengthen our approach to competing with China, and to countering its actions that are against our interests and our values,” one senior administration official said Thursday. “We see this is one important step to take what the last administration did and sort of strengthen it, both legally and functionally.”
In a bid to put the policy on stronger legal footing, the Biden administration will shift responsibility for identifying the banned companies from the Defense Department to Treasury’s Office of Foreign Assets Control, which enforces economic sanctions. OFAC was scheduled to release a list Thursday naming the 59 China-based companies subject to securities trading restrictions.
Administration officials said Thursday that Treasury would provide greater expertise on which companies should be subject to restrictions. The officials cited two lawsuits where China-based companies Luokung Technology and Xiaomi sued and won exemptions to the Trump ban.
Another change from Biden will expand the scope of the national emergency determinations underpinning the policy. The new order will contain findings that the use of Chinese surveillance technology in other countries and the development of Chinese surveillance technology to facilitate repression “constitute unusual and extraordinary threats.”