The Biden administration has finalized restrictions to limit U.S. investments in advanced technology in China, such as AI, as announced by the Treasury Department.
Citing national security concerns, the rules have been contemplated over the last year and are now set to be enacted on January 2.
The restrictions will forbid U.S. citizens and American companies from direct engagement in critical sectors including AI, semiconductors, and quantum computing.
Any US investors involved in lesser tech “that may contribute to the threat to the national security of the United States” will be obliged to inform the Treasury of their activity, as detailed in a statement.
Paul Rosen, the assistant secretary of the Treasury for Investment Security stated the measures would ensure “US investment is not exploited to advance the development of key technologies by those who may use them to threaten our national security.”
He went on to detail how hostile foreign states should not be able to benefit from this flow of capital to assist the development of “their intelligence, and cyber capabilities.”
@USCC_GOV was first to recommend screening of outbound investments in China that would advance #CCP interests and undermine U.S. economic and national security. Today @USTreasury issued final regulations. Big step forward. Passing a law still needed. https://t.co/TfIBxvClZY
— Michael Wessel (@MWesselDC) October 28, 2024
President Biden’s executive order
China reacted with disdain toward the official U.S. position, accusing Washington of engaging in “anti-globalization”.
“Beijing is strongly dissatisfied and firmly opposes the United States’ insistence on introducing restrictions on investment in China, and has lodged solemn representations with the United States,” said a statement from the Ministry of Foreign Affairs.
The curbs follow the executive order signed by Joe Biden last year, curtailing investment in semiconductors and microelectronics, quantum computing, and some AI projects.
At the time, the 46th and current POTUS warned that U.S. investment dollars could be aiding the development of sensitive technologies in “countries of concern’’ – specifically China including Hong Kong and Macao – as reflected in the recent comments of the Treasury’s Rosen.
Acting as a bulwark against Chinese expansion in advanced technology is a rare position that gains bi-partisan consensus from both Republicans and Democrats in Washington.
Image credit: Via Ideogram