President Joe Biden of the US signed an executive order on Wednesday to limit certain American investments in critical high-tech sectors in China; this was denounced as “anti-globalization” by Beijing.
As part of Washington’s effort to restrict access to important technology, the long-awaited regulations, which are slated to be adopted next year, target industries including semiconductors and artificial intelligence.
In a letter to Congressional leaders announcing the executive order, Biden stated that “the commitment of the United States to open investment is a cornerstone of our economic policy and provides the United States with substantial benefits.”
Although some US expenditures “may accelerate and increase the success of the development of sensitive technologies and products in countries that develop them to counter US and allied capabilities.”
According to the Treasury Department, the initiative will forbid new private equity, venture capital, and joint venture investments in sophisticated semiconductors and some quantum information technologies in China.
Under the condition of anonymity, a senior government source stated, “The outbound investment programme will fill a critical gap in the United States’ national security toolkit.”
What we’re discussing is a focused strategy designed to keep [China] from acquiring and utilising cutting-edge technology to accelerate military modernization and jeopardise US national security.
The Treasury is debating whether there should be a notice requirement for US investments in Chinese companies engaged in less sophisticated semiconductors and certain types of artificial intelligence.
The Treasury Department warned that China could take advantage of US investments to increase its capacity to develop sensitive technologies vital to military modernization.
However, it plans to provide an exception for some transfers from US parents to US subsidiaries and investments in publicly traded US securities.
The move was denounced by China’s foreign ministry as an effort to “engage in anti-globalization and de-sinicization,” and the ministry issued a dire warning that China would “resolutely safeguard its own rights and interests.”
Beijing “has lodged solemn representations with the United States” and “is strongly dissatisfied and opposes the United States’ insistence on introducing restrictions on investment in China,” the ministry said in a statement.