Looking Ahead On China: Engaging In Strategic Compliance Through Geopolitical Analysis

Key Takeaways:

• U.S. prohibits investments in 59 Chinese Military Industrial Companies (NS-CMIC)
• The prohibition forms part of a larger U.S.-China confrontation that has implications across finance, industry, and even academia.
• Companies need to understand the geopolitical forces behind trade relations in order to act ahead of regulations rather than being caught in a reactive position.
• The question for every company, whether an investment fund holding securities in Chinese companies, a startup looking for finance from overseas, or a manufacturer securing its supply chain, is: Where will the U.S.-China confrontation go next, and how do we prepare?

A June 3, 2021 Executive Order (see our post here) designated 59 Chinese companies in which U.S. companies are prohibited from buying or selling securities. According to the Biden administration, those companies "threaten the security or democratic values of the United States and [its] allies." That statement