Biden Plans Executive Order to Limit US Tech Investments in China
President Joe Biden is set to sign an executive order by mid-August that will impose restrictions on critical U.S. technology investments in China. The order will primarily focus on semiconductors, artificial intelligence (AI), and quantum computing. However, it will not impact existing investments and will solely prohibit specific transactions. Any other deals will need to be disclosed to the government.
This executive order has been in the works for some time and while the timing has been changed before, officials are currently preparing for a rollout in the second week of August. The discussions have shifted from the content of the measures to the implementation of the order and the accompanying rule. Those familiar with the matter report that the restricted transactions will not come into effect until next year.
To determine the specific scope of the order, there will be a rule-making process involving a lengthy comment period for stakeholders to provide input on the final version. A spokeswoman for the National Security Council declined to comment on the matter.
It is important to note that as tensions between the U.S. and China rise, there are concerns about potential retaliation from Beijing. China’s envoy in Washington has already stated that there will be retaliatory measures if the United States imposes new limits on technology or capital flows.
The idea of restricting critical U.S. technology investments in China was initially brought up by National Security Adviser Jake Sullivan in July 2021. Lawmakers from both parties have shown interest in addressing this issue legislatively, though a bill has not yet been presented to President Biden.
In fact, this week, the Senate passed an amendment to the national defense policy bill, which mandates firms to notify the government about certain investments in China and other countries of concern. However, these investments will not be subject to review or possible prohibition.
In conclusion, President Biden is taking steps to restrict U.S. technology investments in China, particularly in the areas of semiconductors, AI, and quantum computing. While the order will not affect existing investments and will only prohibit specific transactions, the exact scope will be determined through a rule-making process. However, it remains to be seen whether this executive order will face any delays or changes in the coming weeks.
