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The White House in Washington, DC.

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WASHINGTON—President Trump signed an executive order prohibiting Americans from investing in a clutch of Chinese companies the Trump administration says supply and otherwise support China’s military.

The order blocks American companies and individuals from owning shares directly or through funds that include any among 31 companies identified by the U.S. as aiding the modernization of the People’s Liberation Army, or PLA. Those firms—which include large state-run aerospace, shipbuilding and construction companies as well technology companies like Inspur Group—enable the military’s access to advanced technologies and expertise to help the PLA expand and take a more aggressive posture around the world, administration officials have said.

The Trump administration has attempted to counter Beijing’s rise as a global competitor, economically, politically and militarily, and has turned to executive orders to limit China’s influence.

The order, which administration officials said has been under review for months, prohibits the purchase or investment in emerging markets funds, that include the firms, starting Jan. 11. The order gives investors until November 2021 to divest themselves of any investments containing any of the Chinese securities.

An expanded version of this story appears on WSJ.com

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