Biden to Stop Investments in China Because of Threats to National Security: Report
A senior government source told Reuters that the White House will outline its proposals on Wednesday to ban certain American investments in critical technology in China and demand that the government be informed of other transactions. The proposals are intended to stop U.S. resources from funding the development of technology that would aid China’s military modernisation and jeopardize U.S. national security.
President Joe Biden was anticipated to sign the long-awaited executive order to screen export investments in critical technology to China this week, according to Reuters on Friday. According to a senior government source, the directive is anticipated for Wednesday. On Tuesday, the White House opted not to comment. Officials in the Biden administration have emphasized for months that any limitations on American investment in China would be specifically targeted.
National Security Adviser Jake Sullivan stated in April that “these are tailored measures.” They are not a “technology blockade,” as Beijing claims.
The government did not “want to be overly broad… Anything that’s overly broad hurts American workers and the economy,” according to U.S. Commerce Secretary Gina Raimondo, who made the statement in March. The government is anticipated to focus on direct investments like American venture capital, private equity, and joint venture investments in China’s semiconductor, quantum computing, and artificial intelligence industries.
The government will need to be informed about the majority of investments covered by the decree, according to sources. Certain transactions will not be allowed. The Biden administration intends to mandate companies investing in a wider variety of Chinese businesses to record such activity, according to a story in the New York Times on Tuesday. This would provide the American government excellent insight into financial transactions between the United States and China.
Investments in semiconductors that would be prohibited are anticipated to follow export control guidelines for China that were published by the U.S. Department of Commerce in October, according to sources who spoke to Reuters previously. According to Emily Benson of the Center for Strategic and International Studies (CSIS), a nonpartisan organization that conducts policy research, military users and uses of investments in artificial intelligence will be prohibited, while other investments in the industry will only need to be disclosed to the government.
According to Benson, it will be up to the government to decide whether AI qualifies as military. “They will have to define AI and draw a line between what constitutes a military application of AI,” said Benson, the project director for the CSIS study on commerce and technology. A notice of proposed rule-making is anticipated to be published in response to Biden’s directive. It is anticipated that a comment period will be included before it is approved, and that it will not go into effect right away.
