An executive order recently signed by President Joe Biden takes aim at American investors in the Chinese defense and surveillance industries, naming several companies connected to his son, Hunter Biden.
While it’s not immediately clear how the new restrictions may affect Hunter Biden, the order flagged several companies linked to Bohai Harvest RST, an investment fund he co-founded in 2013.
Hunter Biden’s ties to China’s defense industry, first reported by the Government Accountability Institute in 2018, were a major source of controversy for the Biden campaign. The administration now appears to have confirmed key facts of that reporting, adopting it as official White House policy.
The executive order, issued on June 3, bars Americans from buying and selling publicly traded stock in 59 Chinese companies linked to the PLA, including China General Nuclear and Aviation Industry Corporation of China, two companies with close ties to Bohai Harvest RST.
NBC News estimates Hunter’s stake in BHR to be worth around $4.2 million.
The Treasury Department has made clear the restrictions apply to investment funds that expose Americans to banned securities, but questions remain about whether the rules could apply to funds such as BHR, a foreign fund that is not traded on a stock exchange.
The Biden administration’s new restrictions are a notable divergence from the Obama administration’s less confrontational approach to China. They aim to “ensure that U.S. investments are not supporting Chinese companies that undermine the security or values of the United States and our allies,” according to the White House.
It also puts the spotlight back on Hunter Biden’s overseas investments, a topic the elder Biden downplayed on the campaign trail. The White House under Joe Biden now appears to have confirmed the Government Accountability Institute’s reporting in effectively banning Americans from making investments similar to Hunter Biden’s due to their ties to the Chinese military.
Bohai Harvest RST became an “anchor investor” in CGN’s 2014 IPO. The following year, it partnered with AVIC to acquire Henniges, a Michigan-based automotive parts manufacturer. That deal required federal approval due to possible military applications of Henniges’s products, including anti-vibration and sealing components.
It’s not the first time BHR portfolio companies have come under legal scrutiny. In 2015, federal prosecutors indicted CGN for stealing nuclear secrets. In 2019, the Commerce Department flagged Megvii, an AI developer listed as a BHR portfolio company, over its ties to human rights abuses in Xinjiang.
In November 2020, former President Donald Trump issued an executive order barring investment in both AVIC and CGN. Joe Biden’s executive order, which removed a number of other companies, maintained both listings and identified several additional subsidiaries of AVIC subject to the ban. American investors now have a deadline of Aug. 2 to cease trading the flagged stocks, while current shareholders have until June 2022 to divest before the ban on trading takes effect.
In February, White House press secretary Jen Psaki told reporters Hunter Biden was still working to “unwind” his investment in BHR. Currently available records show Hunter Biden still owns a 10% stake in BHR. Neither George Mesires, Hunter Biden’s attorney, nor Bohai Harvest RST responded to requests for comment.
Hunter Biden’s overseas business dealings were a significant source of controversy during the 2020 presidential election. Republicans presented Hunter Biden’s relationship with Bohai Harvest as evidence the Biden administration would go soft on China, while their counterparts on the Left broadly dismissed the allegations against Hunter as misinformation.
This latest decision complicates both narratives, defying early predictions that Joe Biden would avoid standing up to China in a way that undermines his son’s partners while turning one of the main criticisms of Hunter Biden’s activities into policy.