Biden signs order restricting tech investment in China

0 Comment(s)Print E-mail Xinhua, August 10, 2023
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U.S. President Joe Biden walks on the South Lawn at the White House in Washington, D.C., the United States, May 10, 2023. [Photo/Xinhua]

U.S. President Joe Biden signed an executive order Wednesday that would block U.S. high-tech investments in China despite Washington repeatedly stating it has no interest in "decoupling" from China.

Designating China as a "country of concern," the order aims to limit U.S. investments in three categories of national security technologies: semiconductors and microelectronics, quantum information technologies and certain artificial intelligence systems, according to the U.S. Treasury Department.

The order also requires U.S. venture capitalists and other investors to notify the Treasury of prospective investment into Chinese companies for developing technologies in the targeted sectors.

The order is expected to go into effect following a 45-day comment period.

Having been planned for months, the order is widely considered another step to suppress China's technological progress under the pretext of national security as the United States doubles down on its high-tech rivalry with China.

In response, the Chinese Ministry of Commerce said early Thursday that "the United States restricted outbound investments from its companies, engaging in 'decoupling' in the investment sector under the guise of 'de-risking,' which is a complete departure from the principles of a market economy and fair competition that the U.S. has long claimed to champion."

It continued: "It has undermined the international trade order and severely disrupted the security of global industrial and supply chains. China is gravely concerned over this and reserves the right to take measures."

U.S. tech and financial companies have already expressed concern, fearing that such a move would have a chilling effect on all cross-border investment activities in China.

Bloomberg also warned previously in an opinion piece that "the policy would risk undermining American competitiveness, with little discernible benefit to national security."

Since taking office, Biden has watered down the "de-coupling" rhetoric as "de-risking" but has ratcheted up its tech blockade on China, business insiders say.

In June 2021, Biden made a similar move by signing an executive order that bans U.S. entities from investing in dozens of Chinese companies with alleged ties to defense or surveillance technologies.

Furthermore, following the Chips and Science Act rolled out last year, the United States imposed a sweeping set of export controls to cut off China from certain semiconductor chips and chip-making equipment. Last month, Washington again made the politically motivated claim that China steals intellectual property.

However, "there's no indication that the restrictions have slowed China's drive," The National Interests, An American website, said in a recent opinion piece. Rather, "available information points to surprisingly rapid progress in China's efforts to work around technology restrictions."

Last year, during his meeting with Chinese President Xi Jinping in Bali, Biden said, "the U.S. side has no intention to seek 'de-coupling' from China."

Senior White House officials have made similar remarks. Treasury Secretary Janet Yellen, for example, tried to reassure China that Washington doesn't want to decouple or separate its economy from China.

But the remarks do not represent a substantial change in policy, said Alex Lo, a columnist for The South China Morning Post. They just sound "less belligerent" while "the underlying hostility remains."

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