1489313 - Hogan Lovells FIS Horizons 2021 update - Flipbook - Page 10
Hogan Lovells
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Therefore, we largely expect many of the Trump
Administration’s policies on China to continue,
barring any unforeseen changes to the systemic
dynamics between the two countries. Based on a
review of Mr. Biden’s public statements, here are a few
policy specifics that financial institutions can expect:
•
Mr. Biden will likely use executive orders and
regulations to limit Chinese products and services
in U.S. critical infrastructure, including U.S.
information technology, telecommunications,
bulk power networks, the use of critical minerals,
and emerging technologies.
•
•
A continued heavy scrutiny of Chinese
investments in the CFIUS review process.
•
Mr. Biden said that Section 301 tariffs on
Chinese goods have been “disastrous for
business and farming” and that President
Trump is going after China “in the wrong way”.
However, he did not promise to remove the
tariffs and is unlikely to remove the tariffs
without China making reciprocal changes in
other areas of focus, like intellectual property
protections for U.S. companies. Companies
may find more success in filing product
exclusion requests than they did during the
Trump Administration.
•
Mr. Biden has been highly critical of the Trump
Administration’s response to human rights
concerns in Xinjiang and Hong Kong SAR.
Companies should expect more sanctions on
targeted Chinese companies and persons,
making compliance in this space more
complicated, including potential reporting
obligations to the SEC for U.S. listed companies.
Expansion of export controls of dual-use items,
stricter scrutiny of end-users of technology,
export control restrictions on Chinese nationals
in the U.S., and existing actions against large
Chinese companies are likely to stay in place
or be expanded. The focus on commercial
and military fusion will continue, with U.S.
companies needing to restrict exports to
military end-users in China.
•
Pending legislation restricting Chinese
companies listing on U.S. stock exchanges
could be passed and supported by a
Biden Administration.
•
Sanctions on Hong Kong SAR and Chinese
financial institutions under the Hong Kong
Autonomy Act will remain a threat for anyone
doing business with persons identified under
the law as undermining democracy and the
rule of law.
•
Efforts to reduce U.S. reliance on China for
critical goods and to compete with China in
emerging sectors such as artificial intelligence
and 5G wireless networks are likely to
continue, as will “clean network” initiatives
seeking to exclude Chinese companies from
U.S. networks.
Even if the politics and policy towards China
do not change much, a Biden Administration
committed to traditional avenues of governance
and diplomacy should lead to a more predictable
policy-making process and more ways for
companies to shape his Administration’s China
policy. Companies should start working on their
trade policy wish lists now, as this process is
already underway.
Authors:
Andrew McGinty
Partner, Hong Kong
T +852 2840 5004
andrew.mcginty@hoganlovells.com
Ben Kostrzewa
Registered Foreign Lawyer
Hong Kong, Washington, D.C.
T +852 2840 5080 (Hong Kong)
+1 202 637 5600 (Washington, D.C.)
ben.kostrzewa@hoganlovells.com
