US President Joe Biden has signed an executive order prohibiting US firms from investing in some of China’s key information technologies, US news outlets reported on August 9.
The executive order, which is expected to come into effect next year, explains that American investments could contribute to the development of “sensitive technologies” by “countries of concern”. The “sensitive technologies” encompass semiconductors and microelectronics, quantum information technology, and some types of artificial intelligence.
The new rules will also require US firms to notify the Treasury Department of investments in a wide array of technology firms. This will apply only to active investments through private equity and venture capital, as opposed to passive investments via the stock market. Its implementation is subject to a comment period by the Department of Justice.
In a public statement released on August 10, China’s foreign ministry said it was “severely dissatisfied” with the news. “China urges the U.S. to properly implement President Biden’s commitment that he has no intention of decoupling from China or obstructing China’s economic development”, the statement read.
The US has made efforts to soften rhetoric on its technological battle with China in recent months, preferring the term “de-risking” over “decoupling”. In May Biden eschewed the concept of “decoupling” altogether, stating that the US does not wish to separate the two economies, but instead hopes to diversify supply chains and “resist economic coercion” – a strategy that the other G7 nations have reportedly agreed to.
