Biden signed an order limiting certain investments with Chinese companies

US President Joe Biden has signed an executive order placing limits on US investments in certain Chinese tech companies, a move that could escalate tensions between the two nations. This move, one of the most prominent taken by the Biden administration to restrict investment in China, follows extensive discussions with G7 members, whom he has urged to take similar steps.

The executive order places a ban on US venture capital firms, preventing them from investing in three key sectors of the Chinese economy: semiconductors, quantum computing and artificial intelligence, senior officials said in a telephone press conference.

In addition, it stipulates that US citizens doing business in China must inform the US government about their investments in these three areas. These restrictions are justified by the notable technological advances that China has achieved in these fields and their possible application in military and intelligence capabilities.

The choice of these specific sectors is based on national security concerns, as it is intended to prevent China from using US technologies to modernize its military. Chinese President Xi Jinping is seeking significant progress in social, economic and military areas by 2035, which could pose a threat to US ally Taiwan.

However, the measure will not take effect immediately. There will be a public comment period to receive input from interested parties, including companies with investments in China. The exact details of how the executive order will be implemented are yet to be defined, and criminal charges are being considered for those who do not comply with the regulations. The option to allow exceptions for investments in bonds and shares of Chinese technology companies by US companies is also discussed.

The executive order likely won’t go into effect until next year, coinciding with Biden’s re-election campaign in the presidential election. In parallel, the Republicans have yet to select their candidate in the primary process, in which former President Donald Trump is considered a favorite.

K. Tovar

Source: CNN

(Reference image source: Jon Tyson, Unsplash)