The Pentagon has delayed a report on Chinese companies with military ties

The Pentagon has not given a legally required report to Congress on Chinese companies with military ties because U.S. President Joe Biden is close to deciding whether Americans can invest in such groups.

Congress asked the Department of Defense in January to make a report by April 15th. But the Pentagon has told lawmakers it has lost the deadline, according to two people familiar with the report.

The delay came when the Biden administration decided executive order Former President Donald Trump signed a ban on Americans from investing in Chinese companies named in the previous Pentagon blacklist.

The US Treasury in January has extended the period for the ban to take effect until May 27. It was designed to give the administration time to evaluate the executive order as part of an extensive review of Trump’s China-related actions.

Biden has taken a a more frightening attitude China’s foreign policy experts than expected.

A Pentagon spokesman did not explain the reason for the delay, but said the defense department will present the report before October.

The The Financial Times reported last year the Pentagon responded to pressure from Trump to complete the initial blacklist, more than two decades after Congress ordered it. The former president used the list as the basis for an order banning direct investment or fund-based investment in companies.

In addition to promising the Pentagon to update its report annually, Congress expanded the criteria for companies supporting the People’s Liberation Army through a “civil-military merger,” a program in which groups must share technology with Chinese armed forces. That has power expand the scope a lot any investment prohibition.

Some U.S. lawmakers have expressed concern about the delay. Tom Cotton, the Arkansas acting senator, said it was “essential for the Department of Defense to document and publicize Chinese military companies operating in the U.S..” He added that the administration needed to “defeat the communist party’s attempts to use our judicial system against us”.

Cotton’s comments came after the Pentagon agreed to remove Xiaomi, a Chinese smartphone maker, from the blacklist after a judge said the reason was a mistake.

The White House has said it is “forced” to remove the company after the courts found Trump the administration failed to create a sufficient legal basis for its decision. According to National Security Council spokeswoman Emily Horne, Biden is “deeply concerned about the possible investments the US may make in companies linked to the Chinese military and is fully committed to sustaining such companies.”

John Smith, a partner in the Morrison & Foerster law firm and a former U.S. Treasury official, said the administration was hindered. “I’m sure the Biden team would like to put everything in order,” Trump said, referring to the complicated legal situation left by Biden. “It’s probably because they can’t see that he’s gentle with China, or that he’s gentle with China.”

Smith said Biden needed to work how to implement the list in a way that would not result in further loss in court.

Eric Sayers, an Asian expert at the American Enterprise Institute think-tank, said while lawmakers were pleased with the delay in implementing the order, they should admit that Biden indicated he would maintain a tough stance.

“The administration has stated that it does not want to abandon the effort, but to improve it through a more rigorous coordination process,” he said. “Congress will have to be patient and see how effective the Biden team is in rebuilding the approach this summer.”

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