Monday, July 15, 2024

President Biden to limit U.S. investment in Chinese cutting-edge military technology vital for military modernization

News Update: Biden Administration to Curb US Investment in Critical Chinese Technology Industries

Title: Biden administration considers curbing US investment in critical Chinese technology industries

The Joe Biden administration is contemplating implementing rules to restrict US investment in key Chinese technology sectors crucial for China’s military modernization. The proposed Treasury Department regulations would prohibit specific US investments in Chinese companies involved in developing semiconductors, quantum computers, and artificial intelligence systems.

This move aims to prevent American financing from supporting the advancement of advanced technology in China that could potentially be used for weapons tracking, government intelligence, and surveillance. If put into effect, this proposal could further strain economic ties with Beijing, especially at a time when trade tensions are on the rise.

The proposed rule, expected to be finalized later this year, would require investors to notify the Treasury Department about certain transactions and explicitly prohibit some types of investments. Additionally, the Treasury Department would have the authority to mandate divestment and could even refer violations for criminal prosecution to the Justice Department.

Earlier in May, President Biden had signed an executive order calling for an investment ban that would primarily impact venture capital and private equity firms engaged with Chinese companies. The recent decision to increase tariffs on imports from China, including semiconductors, solar cells, batteries, and critical minerals, further highlights the administration’s efforts to protect American workers and businesses from unfair trade practices by China.

The White House emphasized that China’s unfair trade practices regarding technology transfer, intellectual property, and innovation pose a threat to American businesses and workers. This directive to increase tariffs under Section 301 of the Trade Act of 1974 underscores the need to counteract the detrimental effects of China’s non-market practices on America’s supply chains and economic security.

In conclusion, the Biden administration’s push to restrict US investment in critical Chinese technology industries reflects a broader strategy to safeguard national security interests and mitigate the risks posed by China’s technological advancements.

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