China’s international trade council has officially requested that the United States carefully review rules that prohibit or restrict U.S. investments in China’s technology sector, according to state television. This comes after U.S. President Joe Biden signed an executive order last month that bans or limits investments in Chinese entities involved in semiconductors, microelectronics, quantum information technologies, and certain artificial intelligence systems. The China Council for the Promotion of International Trade, supervised by the Ministry of Commerce, expressed concerns about the order’s broad restrictions on investors and transaction types, arguing that it fails to differentiate between military and civilian purposes. The council believes that such restrictions not only pose transaction risks and compliance costs but also harm the globally interdependent industrial chain.
Meanwhile, U.S. financial firms, which were given until September 28 to provide input, are also seeking more clarity on the proposed rules. They argue that the regulations are too vague and place the burden of compliance on investors. The ambiguous nature of the order raises concerns about its potential impacts on the financial industry and international trade. The rules, expected to be implemented in the coming year, aim to safeguard national security and prevent U.S. capital from supporting China’s military. However, stakeholders are urging the U.S. government to provide clearer guidelines to avoid unintended consequences that could disrupt the global industrial chain.
In summary, China’s international trade council has formally requested the U.S. government to carefully consider the rules that restrict American investments in China’s tech sector. The council claims that the U.S. executive order imposes vague restrictions on investors and transaction types, without distinguishing between military and civilian purposes. At the same time, U.S. financial firms are seeking more clarity on the proposed regulations, highlighting the vagueness of the order and its potential compliance costs. The rules are expected to be implemented in the near future, aiming to safeguard national security, but stakeholders are concerned about potential disruptions to the interconnected global industrial chain and are calling for clearer guidelines.
