United States: The United States President Mr. Joe Biden has signed an executive order that will narrowly prevent certain US investments in sensitive technology in China. The order will further require government notification of funding in other tech sectors.
Mr. Biden stated in a letter to Congress that he was declaring a national emergency to deal with the threat from countries like China “in sensitive technologies and products critical to the military, intelligence, surveillance, or cyber-enabled capabilities.”
The long-awaited order authorises the US Treasury Secretary to prohibit or restrict US investments in Chinese entities in three sectors, including semiconductors and microelectronics, quantum information technologies, and certain artificial intelligence systems.
According to senior administration officials, the move is part of national security goals rather than economic interests, and the categories it covered were narrow in scope. The order intends to limit China’s use of US investments in its tech companies to strengthen its military.
Senate Democratic Leader Mr. Chuck Schumer praised Mr. Biden’s order, commenting that “for too long, American money has helped fuel the Chinese military’s rise. Today, the United States is taking a strategic first step to ensure American investment does not go to fund Chinese military advancement.”
The order seeks to prevent US capital and expertise from helping develop technologies that could support China’s military modernization. It is focused on private equity, venture capital, joint ventures, and greenfield investments. Most investments captured by the order will require the government to be notified about them.
Treasury noted that it anticipates exempting “certain transactions, including potentially those in publicly traded instruments and intracompany transfers from US parents to subsidiaries”.
Mr. Liu Pengyu, spokesperson for the Chinese embassy in Washington, remarked that the new limits would “seriously undermine the interests of Chinese and American companies and investors.” Mr. Pengyu added that China would take steps to “safeguard” its rights.
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