The White House is set to announce new investment restrictions on China, aiming to protect U.S. national security. According to a senior government source, the plans will prohibit certain U.S. investments in sensitive technology in China, while also requiring notification of other investments. The goal is to prevent American capital and expertise from contributing to the development of technologies that could support China’s military advancement and potentially threaten U.S. national security.
President Joe Biden is expected to issue the long-awaited executive order on screening outbound investments in sensitive technologies to China this week. The order is anticipated to be implemented next year after a series of public comments and rounds of feedback.
The Biden administration has emphasized that any restrictions on U.S. investment in China will be carefully targeted and not constitute a blanket ban. They aim to take a tailored approach, ensuring that the measures do not hurt American workers or the economy.
The upcoming regulations are expected to primarily focus on active investments, such as U.S. private equity, venture capital, and joint venture investments in areas like semiconductors, artificial intelligence, and quantum computing. Most investments captured by the order will require notification to the government, while certain transactions may be prohibited altogether.
The details of the plan are still being finalized, but it is unlikely to cover passive or securities investments. The Biden administration also aims to broaden the reporting requirements for firms investing in various Chinese industries, which would provide greater visibility into financial transactions between the U.S. and China.
Investments in semiconductors that will be subject to restrictions are expected to align with the U.S. Department of Commerce’s export control rules for China issued in October. The forthcoming regulations are also likely to address artificial intelligence and quantum computing, focusing on specific military applications and certain sensor technologies.
Overall, these measures reflect the U.S. government’s efforts to balance economic interests with national security concerns in its approach to investments in China. By targeting specific sectors and technologies, the administration aims to prevent the unintentional support of technologies that could pose a risk to U.S. interests while keeping American workers and the economy in mind.
