Biden bans US investment in Chinese tech as he declares ‘national emergency’

Biden bans US investment in Chinese tech as he declares ‘national emergency’

10 Aug    Finance News, News

President Joe Biden on Wednesday signed an executive order that will prohibit some new U.S. investment in China in sensitive technologies like computer chips and require government notification in other tech sectors.

The long-awaited order authorizes the U.S. Treasury secretary to prohibit or restrict U.S. investments in Chinese entities in three sectors: semiconductors and microelectronics, quantum information technologies and certain artificial intelligence systems.

The administration said the restrictions would apply to “narrow subsets” of the three areas but did not give specifics. The proposal is open for public input.

The order is aimed at preventing American capital and expertise from helping China develop technologies that could support its military modernization and undermine U.S. national security. The measure targets private equity, venture capital, joint ventures and greenfield investments.

Biden, a Democrat, said in a letter to Congress he was declaring a national emergency to deal with the threat of advancement by countries like China “in sensitive technologies and products critical to the military, intelligence, surveillance or cyber-enabled capabilities.”

China said on Thursday it is “gravely concerned” about the order and that it reserves the right to take measures.
The order affects normal operation and decision-making of enterprises, and undermines the international economic and trade order, a statement from the Chinese Commerce Ministry read.

The minisry also said it hopes the U.S. will respect laws of the market economy and the principle of fair competition, and refrain from “artificially hindering global economic and trade exchanges and cooperation, or set up obstacles for the recovery of the world economy”.

The Chinese foreign ministry said the country was “strongly dissatisfied” with and “resolutely opposes the U.S.’s insistence on introducing investment restrictions on China”, having also lodged solemn representations with the U.S.

China urged the U.S. to fulfil Biden’s promise of no intention to decouple from China or obstruct China’s economic development, the ministry said in a statement.

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