White House restricts U.S. investment in some Chinese tech, citing national security concerns

A researcher works inside a superconducting quantum computing laboratory at Beijing Academy of Quantum Information Sciences (BAQIS) on February 26, 2021 in Beijing, China.

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WASHINGTON — President Joe Biden signed an executive order on Wednesday aimed at regulating new U.S. investments and expertise that supports Chinese development of sensitive technologies.

Senior administration officials, who spoke on the condition of anonymity, said the executive order involves semiconductors, quantum computing and certain artificial intelligence systems. The measure is expected to be implemented next year.

“What we are talking about is a narrow and thoughtful approach as we seek to prevent the People’s Republic of China from obtaining and using the most advanced technologies to promote military modernization and undermining U.S. national security,” one senior administration official said on a call.

The executive order will also require outbound U.S. investors to provide notifications to the federal government.

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The official added that the executive order is tailored so as not to stifle business between the world’s two largest economies.

“We recognize the cross-border investment flows have long contributed to U.S. economic vitality. This executive order protects our national security interests in a narrowly targeted manner while maintaining our long-standing commitment to open investment,” the official added.

A second official, who also spoke on the condition of anonymity, said the measure was discussed with allies, bipartisan lawmakers and industry leaders. The official added that the new efforts also address intangible investment benefits like introductions to experts and other networking opportunities.

China doesn’t need our money, they’re a net capital exporter. So the thing we’re trying to prevent is not money going into China overall, because they have plenty of money. The thing they don’t have is the know-how,” the official said.

The official added that based on previous discussions the Biden administration expects allies to put forth similar restrictions.

President Biden expected to announce executive order on Chinese investments today

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