The US government is expected to allow Americans to continue investing in Chinese technology giants Alibaba Group Holding Ltd., Tencent Holdings Ltd. and Baidu Inc., after weighing the company’s alleged links with the Chinese military against the potential economic impact of their ban.
Alibaba and Baidu, listed in New York, and Tencent, listed in Hong Kong, were among a dozen companies that were examined for listing in the Department of Defense companies considered to support military, intelligence and China’s security, according to people familiar with the matter. U.S. investors have until November to sell their stakes in any listed company.
The US no longer intends to add the three companies to the list. Nine other Chinese companies will be added, as well as more than 100 subsidiaries of companies already on the list, people said.
The decision puts an end to a week-long battle between Treasury officials, who feared large-scale 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 thought they had a compelling case for companies to be included with the elimination of administrative problems, people familiar with the matter said.
Finally, Treasury Secretary Steven Mnuchin prevailed.