In a move that reflects growing tensions between the United States and China, President Joe Biden has signed an executive order aimed at limiting US investments in Chinese technology companies. The order labels China as a “country of concern” and accuses it of seeking to exploit American business.
The White House announced the executive order in a statement on Wednesday night. According to the statement, the order requires US firms to notify the Treasury Department about certain investments in Chinese tech, and some transactions will be outright prohibited. The aim of the order is to prevent foreign countries, particularly China, from exploiting critical technologies that are vital for the development of military, intelligence, surveillance, and cyber-enabled capabilities which pose a risk to US national security.
While the order is primarily focused on Chinese companies working with sensitive technologies like artificial intelligence, semiconductors, and quantum computing, it will also affect private equity and venture capital investment firms in the US that are looking to do business overseas.
Following the announcement, China’s Ministry of Commerce expressed “serious concern” about the new rules and warned that it “reserves the right to take measures” in response. The ministry urged the US to respect the laws of the market economy and the principles of fair competition, and to avoid obstructing global economic and trade exchanges that hinder the recovery and growth of the world economy.
Biden’s executive order builds upon previous export controls on advanced computer chips and goes as far as declaring a national emergency to address China’s rapid technological advancements. The administration views China’s technological progress as an “unusual and extraordinary threat to the national security of the United States.”
This latest move is part of an ongoing trade dispute between the US and China. The Biden administration has previously taken action against Chinese firms such as Huawei and ZTE Corp., and China has repeatedly criticized US trade and tech policies since Biden took office. China has accused the US of politicizing, instrumentalizing, and weaponizing tech issues in an attempt to hinder other countries’ technological advancement.
The signing of the executive order comes at a critical time as the US and China navigate their complex economic and trade relationship. Both countries have been engaged in a series of tariffs and trade restrictions over the past few years, with tensions ranging from intellectual property disputes to allegations of unfair trade practices. While the executive order is intended to protect US national security, it is likely to further strain relations between the two economic powerhouses.
As the US and China continue to grapple with their differences, the impact of these trade policies on the global economy remains uncertain. The interconnectedness of the modern world means that actions taken by one country can have far-reaching consequences for others. It is essential for both sides to engage in constructive dialogue and find a balance that protects their respective interests while promoting stability and prosperity in the international community.