The US government has said that it is finalising new regulations to restrict investments in Chinese technology sectors, including artificial intelligence (AI), semiconductors and quantum computing, saying that they may pose national security risks.
According to a report by news agency Reuters, the proposed rules by the Biden administration are set to take effect on January 2. They will be implemented by the Treasury’s newly established Office of Global Transactions, the report added.
New rules signed by US President in 2023
The rules were passed by the US Treasury in June and prompted by an executive order President Joe Biden signed in August 2023. The Treasury described the technologies covered as critical to advancing “military, cybersecurity, surveillance, and intelligence applications.”
Senior Treasury official Paul Rosen highlighted that the rule targets innovations like “cutting-edge code-breaking computers or next-generation fighter jets,” adding that US investments must not support countries deemed as security risks in developing military and intelligence capabilities.
The US says that its investments often provide managerial expertise and access to talent networks. The regulation is part of a broader US strategy to prevent American expertise from aiding China’s efforts to advance in high-stakes tech sectors and dominate global markets.
Commerce Secretary Gina Raimondo previously emphasised the necessity of these measures to halt China’s progress in military-related technologies.
Rules allow certain investments but…
While the rules do allow US investments in publicly traded Chinese securities, Treasury officials clarified that existing regulations already prevent transactions with specific Chinese companies linked to military development.
Additionally, the House Select Committee on China has voiced concerns over major US index providers funnelling American capital into Chinese companies believed to support China’s military expansion.