US restricts investments in China’s sensitive tech amid security concerns
The US government is taking action to limit American investments in sensitive technologies in China, including semiconductors, microelectronics, quantum computing, and AI.
The White House has initiated steps to restrict certain U.S. investments in sensitive technologies in China, focusing on semiconductors, microelectronics, quantum computing, and AI. In a recent executive order, President Joe Biden directed the US Treasury Department to monitor and control some American investments in semiconductors, microelectronics, quantum computing, and AI.
The Biden administration has issued an executive order that will tighten restrictions on US investments in certain “countries of concern,” with China, Hong Kong, and Macau initially targeted. The aim is to prevent national security risks by regulating investments in Chinese companies and entities that could provide military and intelligence advantages. The rules will only apply to future investments and will not be retroactive. The Treasury has also issued an advance notice of proposed rulemaking, allowing time for public comment before finalizing the regulations. The process could take months. The Treasury will be able to investigate violations, impose penalties, and unwind future investments.
The program will focus on transactions that could convey “intangible benefits” to Chinese entities. The Treasury is considering prohibiting investments in certain sectors, such as electronic design automation software, semiconductor manufacturing equipment, and quantum computers. It may also require notification for investments in firms involved in the design and fabrication of integrated circuits. The moves have been discussed with allies, and while no coordinated action is expected immediately, countries like Britain and the European Union have signaled similar intentions.