U.S. President Joe Biden will change the country's ban on investments in companies with alleged links to China's military, according to sources familiar with the matter.
The Donald Trump policy has been challenged in court over poor definitions used to determine if companies had such links.
Biden's Treasury Department will create a new list of companies with alleged connections to China's defense and surveillance technology sectors, the sources said.
The current list of banned companies is based on a congressionally mandated Defense Department report. Biden's amendment, which he is expected to sign later this week or early next week, will seek to include companies with links to state-owned entities in the defense and surveillance technology sectors.
Experts said the government was expected to keep most of those already on the list while adding new companies. The Treasury Department will work with the State and Defense departments to create the new list.
White House officials said the revision was necessary to ensure actions based on the list would be legally sound and sustainable. Most politicians support Biden's tougher stance on China.
Arkansas Senator Tom Cotton said Thursday the move is welcomed because the government needed to ensure China didn't get access to the country's resources.
"It's imperative the U.S. government continues to expand this list of China military companies - these firms shouldn't have access to U.S. technology and capital markets. We are arming and funding our leading competitor," Cotton said.
A bipartisan group of politicians, including senators from Arizona, Florida and Wyoming, supported the move.
"The U.S. government must continue to act boldly in blocking the Chinese Communist Party's economic predation against our industrial base. We must not allow China to erode America's military primacy," the group said in a letter to Defense Secretary Lloyd Austin.