US President Joe Biden issues an executive order restricting American investments in sensitive high-tech sectors in China. In response, China criticizes the move as “anti-globalization,” while concerns over the impact arise amid diplomatic efforts.
US President Joe Biden on Wednesday issued an executive order to restrict certain American investments in sensitive high-tech areas in China, a move Beijing blasted as “anti-globalization.”
The long-anticipated rules, expected to be implemented next year, target sectors like semiconductors and artificial intelligence as Washington seeks to limit access to key technologies.
“The commitment of the United States to open investment is a cornerstone of our economic policy and provides the United States with substantial benefits,” Biden said in a letter to Congressional leaders announcing the executive order.
“However, certain United States investments may accelerate and increase the success of the development of sensitive technologies and products in countries that develop them to counter United States and allied capabilities.”
According to the Treasury Department, the program is set to prohibit new private equity, venture capital, and joint venture investments in advanced semiconductors and some quantum information technologies in China.
The Treasury is considering a notification requirement for US investments in Chinese entities involved in less advanced semiconductors and activities relating to certain types of artificial intelligence.
China could exploit US investments to further its ability to produce sensitive technologies critical to military modernization, the Treasury Department said.
But it anticipates creating an exception for certain US investments into publicly traded securities and transfers from US parents to subsidiaries.
China’s Foreign Ministry blasted the move as an attempt to “engage in anti-globalization and de-sinicization,” warning that China would “resolutely safeguard its rights and interests.”
“Beijing is strongly dissatisfied and firmly opposes the United States’ insistence on introducing restrictions on investment in China and has lodged solemn representations with the United States,” the ministry said in a statement.
While the volume of dollars or numbers of transactions covered by a ban or notification regime are likely to be quite small, it does not necessarily mean the overall impact will be limited, said Emily Benson, director of the Project on Trade and Technology at the Center for Strategic and International Studies (CSIS).
The latest restrictions come shortly after visits by several high-level US officials to China as Washington and Beijing aim to stabilize ties.
Miroslava Salazar, with AFP
