President Joe Biden’s administration detailed new rules Wednesday limiting US investments in advanced technology industries in China in an effort to protect national security at a moment of heightened tension with Beijing.
The new rules would place restrictions on investments by US private equity and venture capital firms, as well as joint ventures, in Chinese artificial intelligence, quantum computing and semiconductors. The rules will be subject to a public comment period.
Long in the works, the new restrictions are meant to prevent American knowledge and money from flowing to China and to tighten the amount of cutting-edge technology available to the Chinese military. Officials announcing the step repeatedly emphasized their goal was to limit US capital from aiding China’s military – not to damage China’s economy.
“This is a national security action, not an economic one. We recognize the important role that cross border investment flows play in US economic vitality, and this executive order [is] narrowly protecting our national security interests,” one official said in a call with reporters Wednesday.
China’s Foreign Ministry on Thursday said it has “lodged a stern representation” with the US over the proposed investment restrictions, calling them a “blatant act of economic coercion and scientific and technological bullying” whose “real purpose” was to “deprive China of its right to development.”