Washington, 9 Aug, 2023 (GNP): President Joe Biden’s administration announced new rules on Wednesday that will impose limitations on US investments in advanced technology sectors within China. These rules are aimed at safeguarding national security amidst escalating tensions between the United States and Beijing.
The anticipated regulations are expected to place constraints on investments by US private equity, venture capital firms, and joint ventures in fields such as Chinese artificial intelligence, quantum computing, and semiconductors. These restrictions are intended to prevent the outflow of American expertise and funds to China while limiting the availability of cutting-edge technologies accessible to the Chinese military.
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US Treasury Secretary Janet Yellen discussed these measures, designed to slow China’s technological and military advancement, in discussions with Chinese counterparts in July. The measures, according to Yellen and other top administration officials, are of a limited nature and not intended to disrupt China’s economy, but rather to safeguard American national security interests.
The rules would also enhance government insight into US investments in China by compelling companies to report their activities, sources said.
The backdrop of this development lies in the ongoing exchange of export restrictions between the United States and China, focusing on high-tech products. The Biden administration’s move follows apprehensions in Washington about the potential threat posed by Beijing to US national security.
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Meanwhile, China has harshly criticized the regulations and asserted that the US is aiming to stifle its economic growth. During a conversation with Biden last year, Chinese President Xi Jinping brought up the issue of chip constraints.
However, the Biden administration is working to align other countries in adopting similar measures to mitigate risks associated with China’s supply chains, a sentiment gaining traction in Europe.
Amidst these regulatory actions, President Biden aims to foster a more stable US-China relationship, including improved communication mechanisms and high-level diplomatic engagements. The possibility of a meeting between US President Joe Biden and Chinese President Xi Jinping during forthcoming leaders’ summits has not been ruled out.
