Biden issues order restricting tech investments in China

President Biden on Wednesday issued an executive order blocking Americans from investing in certain Chinese sectors, citing the risk that those investments could spur military or intelligence capabilities.

Biden’s executive order will designate China as a “country of concern,” and it will limit American investments in three categories of national security technologies: semiconductors and microelectronics, quantum information technologies, and certain artificial intelligence systems, according to the Treasury Department.

The Treasury Department said the order is “narrowly targeted” in an effort to protect U.S. national security interests while maintaining a commitment to open investment.

“As part of a comprehensive, long-term strategy to advance the development of sensitive technologies and products, the [People’s Republic of China] is exploiting, or has the ability to exploit, U.S. investments to further its ability to produce a narrow set of sensitive technologies critical to military modernization,” the Treasury Department said in a press release announcing the executive order.

“Such U.S. investments are often accompanied by certain intangible benefits that help companies succeed, such as managerial assistance, investment and talent networks, and market access,” the department said.

The rules are expected to go into effect following a 45-day comment period. The new restrictions would apply specifically to new investments.

The move comes as the Biden administration has sought to ease tensions with Beijing, with the president frequently insisting he wants competition, not conflict between the two nations.

Treasury Secretary Janet Yellen traveled to China in early July, where she advocated for U.S. interests and appealed to Chinese officials for cooperation on global issues like climate change.

Commerce Secretary Gina Raimondo is reportedly planning to visit China later this month.