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Trump admin considering banning all US investments in China

Chinese President Xi Jinping, right, and President Donald Trump at the square outside the east gate of the Great Hall of the People in Beijing, capital of China, Nov. 9, 2017. (Pang Xinglei/Xinhua/Sipa USA/TNS)
September 27, 2019

President Donald Trump is considering various blocks to U.S. investments in China, including a plan that could block all U.S. investments in Chinese companies.

The latest take on trade considerations, as reported by CNBC is yielded few details on the potential scope and start date of U.S. restrictions on Chinese companies, but would be intended to protect U.S. investors from risks associated with the lack of regulatory oversight in Chinese markets.

An unnamed source told CNBC to the proposal is in its preliminary stages and nothing has been decided.

The news may be the latest wrinkle in Trump’s ongoing trade fight with Chinese President Xi Jinping. Both companies have placed billions in tariffs on the other’s import goods. The move may also affect upcoming trade talks scheduled in Washington between the U.S. and China, which are to resume on October 10, according to CNBC.

The Chinese government has recently made efforts to increase foreign investments in its markets.

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Stocks for Chinese companies like Alibaba and Baidu have already dropped since the first suggestion of the news. The Chinese yuan was also weakened by the news, falling to an exchange rate of 7.15 yuan to one U.S. dollar.

The S&P 500 also suffered Friday morning. The stock market index had posted a 130 point gain early on Friday morning, but that gain was reversed amid the news of potential action on China. The Nasdaq also saw a one percent drop, according to CNBC.

While specifics on the deal remain limited, Trump has previously considered similar measures like restricting Chinese investments in U.S. companies. A June 2018 report by Reuters, noted the proposal by Treasury Secretary Steve Mnuchin would be used to raise merger security and safeguard against Chinese access to key American technologies.

At the time of the 2018 proposal, Trump said it would target U.S. investment by all countries, not just China.

““We have the greatest technology in the world. People copy it. And they steal it, but we have the great scientists, we have the great brains and we have to protect that and we’re going to protect it and that’s what we’re doing,” Trump said in 2018.