Our related news last month that the US government is planning to restrict critical investments in China was recently made official when US President Biden signed the executive order banning it. The U.S. government says that, as with chip-related sanctions, this move will prevent China from using U.S. investors’ money to develop its military, produce advanced weapons, and undermine U.S. security.Another blow from the USA to China
The new decision gives the US Treasury the authority to limit or ban US investments in three areas developed by China: semiconductors, artificial intelligence and quantum computing. Reuters states that the measure targets private equity, venture capital, joint ventures and greenfield investments.
Biden said in a statement that countries like China have declared a national emergency to deal with the threat of advances in “sensitive technology and products critical to military, intelligence, surveillance or cyber capabilities.” The measures are expected to be implemented next year after several rounds of public consultation, including an initial 45-day comment period. During this period, deficiencies in the law, if any, can be corrected.
The new ban is not the first and China may retaliate
China is of course not happy with the new rules and has said it is “serious” and reserves the right to take action. He warned that this US decision undermines the international economic and commercial order and harms the economic and commercial interests of American companies themselves. A spokesperson for the Chinese embassy in Washington said that more than 70,000 US companies do business in China. The Chinese government has previously promised to retaliate if the Biden administration imposes new restrictions on technology and capital entering the country.In July, China already announced new controls on exports of two metals, gallium and germanium, which are vital parts of the semiconductor, telecommunications and electric vehicle industries.
The US has been hitting China with sanctions on semiconductors for a long time now. In August last year, new rules were introduced to China, restricting the export of chip production vehicles. More US sanctions were imposed in October. These restricted shipments of American-made electronics or other products that China could use to create chipmaking tools or equipment. It also prevented non-Chinese companies in other countries from using American equipment to serve Chinese customers unless licensed by the United States. Earlier this year, the Netherlands and Japan agreed to join the US in restricting chipmaker exports.
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