US bans investment in Chinese high technology
US President Joe Biden has just signed an executive order, restricting some investment activities in the high-tech sector of China, Hong Kong, and Macao.
Under an executive order signed on August 9, Americans are prohibited from performing certain“certain transaction”in the fields of semiconductors, microelectronics, quantum, artificial intelligence (AI). They must notify the Ministry of Finance when making such transactions.
President Joe Biden declared a national emergency in response to“countries of concern”is growing rapidly“sensitive technology”, maybe“significantly improve the ability to conduct operations that threaten US national security.”
China, Hong Kong, and Macau are the “countries of concern” mentioned in the executive order, according to Reuters. The Treasury Department will implement the executive order in consultation with other agencies, including the Commerce Department, and will seek public feedback on its implementation.
According to a statement from the Ministry of Finance, the order aims to protect national security while maintaining a long-term commitment to open investment. The Ministry plans to exempt some“certain transactions, including potential transactions in publicly traded instruments and intra-company transfers from the U.S. parent company to subsidiaries.”
On the morning of August 10, the Chinese Ministry of Commerce issued a statement criticizing the US for“seriously deviated from the principles of market economy and fair competition that they have consistently promoted”.
Washington’s move could affect normal corporate governance decisions, disrupt international trade and economic orders, and seriously disrupt global supply chains and industrial connectivity, an anonymous ministry source said. The ministry expressed “deep concern” and said it had the right to take necessary measures, without elaborating.
The idea of screening investments to China has been floated before, Reuters reported. The Foreign Investment Risk Review Modernization Act of 2018, under former US President Donald Trump, initially included provisions giving the Committee on Foreign Investment in the United States the power to review foreign investment. However, the business community lobbied to remove the provision from the law.
The order was signed on the one-year anniversary of Mr. Biden signing the CHIPS and Science Act, which limits investment in advanced semiconductor manufacturing in China.
The investment restrictions on China are expected to increase tensions between Washington and Beijing. The US has issued several export bans to limit Chinese companies' access to AI chips and advanced chipmaking equipment.
