US National Security Advisor Robert O'Brien said President Trump has no higher priority than ensuring the security of the Americans.
In retaliation, China put foreign firms and individuals violating normal market transactions in the country - interrupting deals with Chinese firms - or taking discriminatory measures against Chinese companies on a blacklist.
China yesterday congratulated U.S. President-elect Joe Biden, who won the November 3 election that President Donald Trump has not conceded, almost a week after the former vice president clinched enough states for the win.
The executive order follows the Department of Defense's list in July identifying 20 firms tied to the Chinese military, including telecommunication companies like Huawei and China Telecom. The order now requires USA companies to be given a license to export specific technology to Semiconductor Manufacturing International Corp.
The order will prohibit U.S. investment firms and pension funds from conducting transactions in 20 Chinese companies that the Pentagon has designated as having military ties in June, in addition to 11 companies added in late August. These include Military contractors or state-owned companies including phone carrier China Telecom Ltd. "This measure not only severely harms the legitimate rights and interests of Chinese companies, it also hurts the interests of worldwide investors including those from the US", Wang said.
Tensions between the two countries have also soared over China's activity in the South China Sea.
China has also launched an anti-dumping probe into Australian wine imports and halted the import of all timber from Victoria and Queensland states after customs officials said they had discovered pests. The agency updated the list with an additional 11 firms in August.
Experts added that China could be a particular target, given Trump's repeated efforts to blame Beijing for the Covid-19 pandemic and the economic conditions of the United States, says Mark Magnier in the South China Morning Post.
Trump also announced in the letter that the Executive Order also bans transactions that evade or avoid, or have the goal of evading or avoiding, its prohibitions.
"We hoped that a gradual liberalisation of the Chinese economy would also lead to some political progress, some liberalisation politically, but since Xi Jinping took over in 2012 we are seeing a more nationalistic and a more aggressive Chinese approach", he said.