Biden Bans Certain New U.S. Investments in China

U.S. President Joe Biden signed an executive order yesterday that will prohibit certain new American investments in China in sensitive technologies such as computer chips. It will also impose requirements to notify the government in the event of investments in other technological sectors. The long-anticipated order grants the U.S. Secretary of the Treasury the authority to ban or impose restrictions on American investments in Chinese entities across three sectors: semiconductors and microelectronics, quantum information technologies, and specific artificial intelligence systems. The aim of the order is to prevent American capital and expertise from assisting China in developing technologies that could support its military modernization and undermine U.S. national security. This measure targets private equity, venture capital, joint ventures, and investments to establish local subsidiaries. In response, the Chinese Ministry of Commerce expressed serious concerns about the order today, stating that it "reserves the right to take measures it deems necessary." It mentioned in a statement that "the order affects the operation and decision-making processes of companies and undermines the international economic and trade system."