Biden’s Executive Order Aims to Limit China’s Tech Advancements, Raises Security Concerns
President Joe Biden has issued an executive order that seeks to curb investments in China’s development of advanced technologies such as artificial intelligence (AI), military-grade semiconductors, and quantum computers. The move is part of a broader effort to restrict China’s ability to develop the technology necessary to compete with the United States military.
Jeremy Mark, a senior fellow at the Atlantic Council, emphasized the national security implications of such technological advancements, stating, There’s a real and direct national security aspect to the development of this technology. The executive order reflects growing concerns about the potential risks posed by China’s technological advancements.
Of the three restricted industries, advanced semiconductors are considered the most critical. These chips are essential components for various technologies, including phones, computers, and cars. However, while the United States leads in semiconductor design tools, it relies heavily on foreign manufacturers, primarily Taiwan’s TSMC, for chip production. To address this dependency, the Biden administration has passed the CHIPS Act, which provides funding for domestic chip manufacturers like Intel to establish semiconductor manufacturing plants in the United States.
China is also investing in chip factories to reduce reliance on foreign suppliers. However, the Commerce Department’s sanctions in October 2022, which placed leading Chinese tech manufacturers on the unverified list, have hindered these efforts. The list restricts Chinese companies from purchasing high-level chips made in the U.S. or its allies, as well as acquiring the equipment needed for manufacturing top-grade chips.
In addition to semiconductors, China has been aggressively pursuing the development of AI-powered equipment, which it considers crucial for military purposes. Chinese President Xi Jinping has emphasized the importance of intelligent warfare and has set a goal for China to become the global leader in AI by 2030. China already produces a significant number of top AI scientists and has extensive research in this field.
Quantum computing is another area where China and the U.S. are competing for technological superiority. Quantum computers leverage the laws of quantum mechanics to perform computations at unparalleled speeds. This technology has significant implications for national security, as it could potentially break existing encryption algorithms, establish unbreakable encrypted communication networks, and develop highly advanced sensors. Both the U.S. and China have allocated substantial funding towards quantum technology research.
President Biden’s executive order empowers the Treasury Department to restrict new investments in Chinese firms focused on semiconductors, quantum technology, and AI. The order will likely require U.S. investors to disclose any previous transactions with these companies. Detailed guidelines outlining the criteria for targeted companies will be developed during a 45-day public comment period.
It remains unclear whether this order will effectively limit China’s ability to innovate in these crucial fields. The lack of specific definitions for AI, quantum technology, and semiconductors in the proposed rulemaking has raised uncertainties. Moreover, this is the first time the U.S. government has implemented broad investment restrictions on domestic firms operating overseas, adding to the overall uncertainty surrounding the order’s effectiveness.
Senate Majority Leader Chuck Schumer sees the order as a strategic first step in ensuring U.S. investments do not aid Chinese military advancements. However, Republicans have voiced concerns about the order’s narrow focus, suggesting that it fails to cover industries China considers critical.
Previous export controls have impacted Chinese companies’ expansion plans due to limited access to chip-making tools, leading to layoffs and reduced orders. Despite this, China claims to have made significant progress in AI and quantum development, although some of their claims have yet to be independently verified.
In conclusion, President Biden’s executive order is an attempt to limit China’s technological advancements in AI, quantum technology, and semiconductors. While the order’s impact remains uncertain, it reflects growing security concerns and aims to protect U.S. national interests. The long-term implications of this order on the tech race between the U.S. and China are yet to be seen.
