US President Joe Biden is to ban American investment in 59 Chinese companies including Huawei in an update on rules first introduced under Donald Trump.  

The ban on new investments will take effect from midday on August 2 at 12:01a m  in New York, according to administration officials who briefed reporters on condition of anonymity. Investors will have one year from that time to fully divest. 

The rules target companies the US says have ties to China’s military or  the surveillance industry,  including the country’s three biggest telecommunications companies.

President Biden’s order is largely a continuation of a policy issued by former President Donald Trump that was challenged in court and confused investors over the extent of its reach to subsidiaries of blacklisted companies.

Mr Biden’s position on Mr  Trump’s order has been closely watched by Wall Street and Capitol Hill, where lawmakers from both parties have called for a strong stance against China over issues ranging from trade to human rights.

Many of the companies in President Biden’s order were already on the Trump administration’s list, including the nation’s largest telecoms: China Mobile Communications Group, China Unicom and China Telecommunications.

Among the defence companies on Mr Biden’s list are Aviation Industry of China, which is one of the best known of the Chinese military giants, China North Industries, China Aerospace Science and Industry Corporation, and China Shipbuilding Industry Co.

The list also includes Hangzhou Hikvision Digital Technology, the developer of surveillance cameras and facial-recognition technology that has helped Chinese authorities roll out “safe city” initiatives in Xinjiang, where ethnic Uyghurs have faced persecution.

Companies on the list that weren’t covered in Mr Trump’s initial ban include Zhonghang Electronic Measuring Instruments and Jiangxi Hongdu Aviation Industry Co.

The US Treasury Department was due to release guidance on the penalties late last night. Treasury will update the list on an rolling basis, one of the officials said.

Under President Biden’s order, the investment prohibitions will apply to subsidiaries of companies only if they are listed by the Office of Foreign Assets Control. The amended order clarifies that the measures will no longer apply to companies whose names closely match the listed entities, the Biden administration officials said.

OFAC’s list will be coordinated with the State and Defence departments.

The Pentagon, which is required by Congress to keep a list of companies linked to the Chinese military, is expected to release additional company names today.   Some companies will be listed by both.