President Biden issued an executive order on Wednesday that blocks Americans from investing in certain Chinese sectors, citing the potential risk to military or intelligence capabilities.
Biden’s executive order will designate China as a “country of concern” and will restrict 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 has stated that the order is specifically focused to safeguard U.S. national security interests while also upholding a commitment to open investment.
“The [People’s Republic of China], as part of a comprehensive, long-term strategy to advance the development of sensitive technologies and products, has the ability to exploit U.S. investments to further its military modernization through a narrow set of sensitive technologies,” the Treasury Department explained in a press release announcing the executive order.
The department further added, “These U.S. investments often come with intangible benefits that aid companies in succeeding, such as managerial assistance, investment and talent networks, and market access.”
The new rules are expected to take effect after a 45-day comment period and will apply specifically to new investments.
This action is being taken by the Biden administration as it seeks to ease tensions with Beijing, with the president emphasizing that he desires competition rather than conflict between the two nations.
In early July, Treasury Secretary Janet Yellen visited China to advocate for U.S. interests and appeal to Chinese officials for cooperation on global issues such as climate change.
Commerce Secretary Gina Raimondo is reportedly planning to visit China later this month.
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