The Treasury Department unveiled a proposed rule that aims to restrict and monitor U.S. investments in China for advanced technologies such as artificial intelligence, computer chips, and quantum computing. This move is in line with President Joe Biden’s executive order from August 2023, which seeks to limit the access of “countries of concern” to American funding for technologies that could bolster their military and intelligence capabilities. China, along with Hong Kong and Macau, has been identified as a country of concern in this context.
In addition to the proposed rule, the Biden administration has also imposed tariffs on Chinese electric vehicles, highlighting the ongoing efforts to counter China’s technological advancements and influence. The proposed rule outlines the necessary information that U.S. investors must provide when engaging in transactions related to these technologies in China, with a focus on preventing funding for AI systems that could have military applications. The private sector will bear the responsibility of ensuring compliance with these restrictions, emphasizing the importance of due diligence in new investments.
The U.S.-China Business Council, representing American firms with business operations in China, has expressed support for the administration’s efforts to protect national security while maintaining commercial exchanges with China. As tensions between the two nations continue to escalate, the Treasury Department is seeking feedback on the proposed rule until August 2024, with expectations of issuing a final version thereafter. Despite the growing challenges in the U.S.-China relationship, officials have reiterated that they are not aiming for complete decoupling from China but rather seeking to address national security concerns related to technology and investments.
