White House Unveils Plan to Restrict U.S. Investments in China’s Sensitive Tech, Safeguarding National Security
The White House is set to announce a plan that will restrict certain U.S. investments in sensitive technology in China. The move comes as part of an effort to prevent American capital and expertise from aiding China’s military modernization and posing a threat to U.S. national security.
According to a senior government source, the White House will release an executive order this week outlining the details of the plan. The order will require the government to be notified of investments in sensitive technologies and will prohibit certain transactions. The aim is to ensure that U.S. investments do not contribute to the development of technologies that could support China’s military capabilities.
The Biden administration has emphasized that any restrictions on U.S. investment in China will be specifically targeted, dispelling Beijing’s claims of a technology blockade. Commerce Secretary Gina Raimondo stated that the administration aims to avoid broad restrictions that could harm American workers and the economy.
The plan is expected to focus on active investments such as private equity, venture capital, and joint ventures in China’s semiconductor, quantum computing, and artificial intelligence sectors. While most investments will require notification to the government, some transactions will be prohibited altogether. The announcement will also mandate that firms involved in a wider range of Chinese industries report their investments, offering greater visibility into financial transactions between the United States and China.
The restrictions on semiconductor investments are anticipated to align with the export control rules imposed by the U.S. Department of Commerce in October. As for artificial intelligence investments, it is likely that military usage will be prohibited, while other investments in the sector will only necessitate notification to the government. Determining which AI applications are considered military-related will be the responsibility of the Biden administration.
President Joe Biden’s executive order will likely signal the start of a notice of proposed rule-making, which will undergo a comment period to consider industry feedback before being finalized. While the order will not take immediate effect, it marks a significant step in safeguarding national security and curbing military support through enhanced restrictions on U.S. investments in China’s sensitive tech sectors.
By implementing focused measures, the White House aims to strike a balance between protecting U.S. national security interests and avoiding broad economic repercussions. With the announcement of this plan, the Biden administration seeks to establish clear boundaries and promote transparency in U.S.-China financial interactions, particularly in sectors crucial to technological advancements. The ultimate goal is to shield American interests while mitigating any potential risks associated with China’s growing technological capabilities.
