The US government is expected to let the Americans continue to invest in Chinese technology giants Alibaba Group Holding Ltd., Tencent Holdings Ltd. and Baidu Inc., after weighing on companies ’alleged ties to the Chinese military against the potential economic impact of banning them.
Alibaba and Baidu, listed in New York, and Tencent, listed in Hong Kong, were among a dozen companies that were being examined for inclusion in a Department of Defense list of companies deemed to support to China’s military, intelligence and security services, according to people familiar with the subject. U.S. investors have until November to undo their stakes in any listed company.
The United States 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 already on the list, according to people.
The decision ends a week-long battle pitting 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 join once administrative issues were resolved, people familiar with the matter said.
In the end, Treasury Secretary Steven Mnuchin prevailed.