"Many of these companies are publicly traded on stock exchanges around the world, and individual investors in the United States can unknowingly provide funds to them through passive institutional investment vehicles such as mutual funds and retirement plans" read a statement issued by National Security Advisor Robert C O'Brien.

"The President’s action serves to protect American investors from unintentionally providing capital that goes to enhancing the capabilities of the People’s Liberation Army and People’s Republic of China intelligence services, which routinely target American citizens and businesses through cyber operations, and directly threaten the critical infrastructure, economy, and military of America and its allies and partners around the world," read the statement.

The relationship between the US and China has deteriorated over numerous issues in recent past.