The US government is expected to allow Americans to invest in Chinese technology giants Alibaba Group Holding Ltd., Tencent Holdings Ltd. and Baidu Inc., after weighing the companies’ alleged links with the Chinese military against the potential economic impact of a ban.
Alibaba and Baidu, listed in New York, and Tencent, listed in Hong Kong, were among a dozen companies that were investigated for inclusion in a Ministry of Defense companies list of companies deemed to be China’s military, intelligence and security services. support, according to people familiar with the case. US investors have until November to divest their interests in listed companies.
The US no longer plans to add the three companies to the list. Nine other Chinese companies will be added, as will more than 100 subsidiaries of companies already on the list, the people said.
The decision concludes a week-long battle in which Treasury officials, fearing widespread sell-off and economic repercussions, sought a tougher fight against Beijing against the State Department and the Pentagon. Until Wednesday morning, many from the State Department and the Pentagon believed they had compelling reason to include the companies once the administrative troubles had been ironed out, those familiar with the matter said.
Ultimately, the Treasury Secretary, Steven Mnuchin, prevailed.