Beijing has mobilized state funds and its capital market to cushion the potential fallout with all
U.S. citizens and entities required to divest from China's military-industrial companies by June
3. One of these blacklisted companies, CloudWalk Technology, an artificial intelligence
solution provider, debuted on the Shanghai STAR Market last week and raised 1.72 billion
yuan ($258 million) from a new share issuance to domestic investors. Xiamen Meiya Pico
Information, a Fujian-based company providing technology for forensic data investigations and
online censorship, announced plans in March to raise up to 760 million yuan through a private
share placement. The stock will be fully purchased by its top shareholder, SDIC Intelligent
Technology, a unit of State Development & Investment Corp., Beijing's strategic investment
arm. The sanctions to ban all Americans from investing in Chinese companies identified as
having military ties originated under U.S. President Donald Trump in November 2019, starting
with 31 companies. It was later amended by President Joe Biden on June 3, 2021, setting the
full enforcement deadline exactly a year later, with the list growing to 59. Nine more were
added, increasing the roster to 68. The majority of the list contains publicly traded companies
in Shanghai, Shenzhen, or Hong Kong, with a few also listed in Europe. Most are related to
military engineering, navigation, space, aviation, rocket, and satellite technologies. They are
elite state conglomerates directly controlled by Beijing. The country's three main network
operators -- China Telecom, China Unicom, and China Mobile -- and oil and gas conglomerate
CNOOC, all targeted along with their unlisted parents, have relisted their shares on the
Shanghai Stock Exchange, while keeping their primary listing in Hong Kong.
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