The US government should allow Americans to continue investing in Chinese technology giants Alibaba Group Holding Ltd., Tencent Holdings Ltd. and Baidu Inc., after weighing the companies’ alleged ties to the Chinese military against the potential economic impact. to ban them.
Alibaba and Baidu, quoted in New York, and Tencent, quoted in Hong Kong, were among a dozen companies examined for inclusion in a Defense Department list of firms considered to support China’s military, intelligence and security services, according to people familiar with the matter. American investors have until November to dispose of their stakes in any company on the list.
The US no longer plans to add the three companies to the list. Nine other Chinese companies will be added, as well as more than 100 subsidiaries of companies that are already on the list, people said.
The ruling ends a weeks-long battle that pitted Treasury officials, who feared widespread sales and economic consequences, against State Department and Pentagon officials seeking a tougher line against Beijing. As of Wednesday morning, many in the State Department and the Pentagon believed they had a compelling case for companies to be included once administrative problems were resolved, people familiar with the matter said.
In the end, Treasury Secretary Steven Mnuchin prevailed.