Biden, a Democrat who has continued some of President Donald Trump's policies on China, said he would extend the policy laid out in his Republican predecessor's executive order of November 2020.
"The PRC is increasingly exploiting United States capital to resource and to enable the development and modernisation of its military, intelligence, and other security apparatuses, which continues to allow the PRC to directly threaten the United States homeland and United States forces overseas," Biden said in a letter to House of Representatives Speaker Nancy Pelosi.
The move is designed to deter US investment firms, pension funds and others from buying shares of Chinese companies that were designated by the Defence Department as backed by the Chinese military.
Biden said China's military industrial complex, supported by its intelligence and other security, continues to constitute an unusual and extraordinary threat.