Reports. In-depth reports on the risk factors and threat implications of economic and financial statecraft.

Over the past three years, RWR has been tracking the capital markets exposure of Chinese companies under various U.S. government sanctions and designations.  This has included identifying the publicly traded securities of these companies (as well as their subsidiaries and affiliates) and the exchange-traded funds (ETFS), index mutual funds, and actively managed mutual funds that include exposure to these securities. 

As part of this effort, RWR has compiled a spreadsheet that identifies the publicly traded securities of the Chinese military and surveillance companies that were added yesterday to the Non-SDN Chinese Military-Industrial Complex Companies List (NS-CMIC List) by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), pursuant to the new Executive Order issued by President Biden.  The spreadsheet also details the exposure of these securities to three of the leading emerging markets indexes that are widely tracked by individual and institutional investors.

According to the EO, U.S. investors will be prohibited from investing in the securities of companies on the NS-CMIC List, beginning on August 2, 2021.  This new EO expands the scope of EO 13959 (as amended), which was issued by President Trump on November 12, 2020. These prohibitions also apply to investments via index funds.

This RWR spreadsheet documents which of the companies on the NS-CMIC List are publicly traded and therefore affected by the new EO.  It also identifies whether these same companies were previously designated by the U.S. Department of Defense as Chinese military companies under Section 1237 of the National Defense Authorization Act (NDAA) for FY 1999 and/or Section 1260H of the NDAA for FY 2021, although these designations by themselves no longer carry any direct capital markets sanctions consequence.  As per the new EO, the identification and listing of Chinese military industrial complex companies is now under the sole jurisdiction of the Treasury Department.

Of the 59 companies added to the NS-CMIC List on June 3, 37 are publicly traded on the Shenzhen, Shanghai, and/or Hong Kong exchanges as A‑shares and H‑shares. Because six of those 37 companies are listed on more than one exchange (dual-listed), there are, in effect, 43 stocks affected by the revised investment ban.

This spreadsheet is intended to serve as an educational resource.  Please reach out with any questions or comments.

Download the Publicly Traded NS-CMIC Spreadsheet here.