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On June 3, Vice President Joe Biden signed an executive order prohibiting American involvement in enterprises linked to China’s military-industrial complex.
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Following President Biden’s executive order banning US investment in firms with ties to China’s military-industrial complex on June 3, the S&P Dow Jones Indices and FTSE Russell are removing additional Chinese companies from their indexes. The announcement follows a rocky week centered on the Chinese ride-hailing firm Didi Chuxing.
Didi Global is a company based in China.
(DIDI is the ticker symbol). While the index providers’ actions are unrelated to Didi’s problems, they do underscore the complexities of investing in China in the face of increased regulatory scrutiny and growing US-China tensions.
The executive order was signed in November, but Biden updated it on June 3, stating that “US investments in Chinese firms that harm the security or democratic ideals of the United States and our allies” are prohibited. As a result, S&P Dow Jones Indices said late Wednesday that 25 Chinese companies would be removed from its index on August 2, while FTSE Russell declared that 20 companies would be removed on July 28. Following Biden’s adjustments, FTSE Russell took the move at the prompting of index users and stakeholders, according to a statement on their website. The majority of the companies affected are listed on the Shenzhen or Shanghai stock markets. The S&P Dow Jones Indices and the FTSE Russell are among the equities that will be delisted.
UAV CH Aerospace
(China, 002389) and
Avic Aviation High-Technology is a company that specializes in aviation technology.
(China: 600862) The FTSE Russell will soar.
The Shipbuilding Industry in China
(China, 601989),
CSSC Offshore & Marine Engineering is a company that specializes in offshore and marine engineering.
(China: 600685) and
First Machinery Group of Inner Mongolia
Others include (600967: China) and others. The S&P Dow Jones Indices will be delisted.
Electronics in China’s Aerospace Times
(China: 600879),
Guizhou Space Appliance (Guizhou Space Appliance)
(China, 002025), and others. Previously, the S&P Dow Jones Indices had omitted Chinese corporations such as
National Chemical Engineering of China
China (601117),
Microfabrication Equipment of the Future
(China: 688012), and
China State Construction International Holdings is a company based in Beijing, China.
Following the first executive order in November, (3311: Hong Kong) was issued. To contact the editors at Barron’s, send an email to editors@barrons.com./n
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