A senior government source revealed that on Wednesday, the White House will unveil its strategy to prohibit specific U.S. investments in China’s sensitive technology sectors. Additionally, the government will mandate that notifications be made for other investment activities.
The primary objective of these plans is to curtail the flow of U.S. capital and expertise that could contribute to the advancement of technologies supporting China’s military modernization efforts, thereby potentially jeopardizing U.S. national security.
Anticipated to be announced on Wednesday, the executive order remains unconfirmed by the White House as of Tuesday.
Throughout recent months, the Biden administration has consistently emphasized the narrow targeting of any restrictions on U.S. investment within China.
In March, U.S. Commerce Secretary Gina Raimondo emphasized the administration’s intention to avoid overly broad restrictions, stating, “We don’t want to be overly broad…. Anything that’s overly broad hurts American workers and the economy.”
The focus of the upcoming order is projected to encompass active investments, including those made by U.S. private equity firms, venture capital entities, and joint ventures operating within China’s semiconductor, quantum computing, and artificial intelligence sectors.
The majority of investments affected by this order are expected to require notifications to the government, with some transactions facing outright prohibitions.
According to a report by The New York Times, the Biden administration intends to mandate firms investing across a wider array of Chinese industries to report such activities. This move is expected to offer heightened visibility to the U.S. government regarding financial transactions between the two countries.
The forthcoming executive order from President Biden is anticipated to direct the publication of a notice of proposed rule-making. Its implementation is not expected to be immediate, and it will likely include a comment period to gather industry feedback before finalization.
