US President Joe Biden is set to ban Americans from investing in dozens of Chinese tech and defence firms with alleged military ties.

The new executive order will come into effect on 2 August, hitting 59 firms including communications giant Huawei. The list of firms will be updated on a rolling basis.

It expands an order previously issued by former President Donald Trump.

Even before the official announcement, China suggested it would retaliate.

Under the new order, US investors will be banned from buying or selling publicly-traded securities for other companies including the China General Nuclear Power Corporation, China Mobile Limited and Costar Group.

US official said that "the prohibitions are intentionally targeted and scoped to maximise the impact on the targets while minimising harm to global markets".

China-US relationship is crucial to both sides and the wider world, with Beijing repeatedly calling on the new administration in Washington to improve relations which deteriorated under predecessor Donald Trump.

However president Biden has insisted, that existing tariffs will be kept in place for now as he looks to boost the US economy, which was hit hard early in the pandemic but is now recovering.