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US Restricts High-Tech Investment in China

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U.S. President Joe Biden signed an executive order on Wednesday to impose restrictions on U.S. investments in some high-tech industries in China.

Biden’s executive order could again heighten tensions between the United States, the world’s biggest economy, and No. 2 China after a period in which leaders of the two countries have held several discussions aimed at airing their differences and seeking common ground.

The new restrictions would limit U.S. investments in such high-tech sectors in China as quantum computing, artificial intelligence and advanced semi-conductors, but apparently not in the broader Chinese economy, which recently has been struggling to advance.

Some investments in those sectors will require government notification; others will be prohibited, but details were not immediately clear.

“We’re pursuing a policy of de-risking with respect to the PRC by taking targeted national security actions, not decoupling our economies,” one official said, according to Reuters.

In a trip to China in July, Treasury Secretary Janet Yellen told Chinese Premier Li Qiang, “The United States will, in certain circumstances, need to pursue targeted actions to protect its national security. And we may disagree in these instances.”

Trying to protect its own security interests in the Indo-Pacific region and across the globe, National Security Adviser Jake Sullivan said in April that the U.S. has implemented “carefully tailored restrictions on the most advanced semiconductor technology exports” to China.

“Those restrictions are premised on straightforward national security concerns,” he said. “Key allies and partners have followed suit, consistent with their own security concerns.”

Sullivan said they are not, as Beijing has claimed, a “technology blockade.”

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