The Biden administration is restricting US investments in China’s high-tech sectors
President Joe Biden on Wednesday signed an executive order restricting US investments in some high-tech sectors in China, including artificial intelligence, semiconductors and quantum computing, citing national security concerns, according to senior officials in the Biden administration.
The officials said the “narrow and targeted” restrictions were necessary to protect US national security by preventing China from using sensitive technologies to bolster its military, develop weapons, and enhance its intelligence and surveillance capabilities.
The move, which is likely to draw a response from Beijing, represents a major move by the Biden administration to restrict the flow of technology to China. The administration — as well as lawmakers on both sides — have expressed concerns that China could use American expertise to modernize its military and weapons.
But it also comes as the White House seeks to improve relations and increase contacts with China, including recent high-level visits by Treasury Secretary Janet Yellen and Secretary of State Anthony Blinken.
“This is a national security measure, not an economic measure,” an official told reporters on Wednesday. “We recognize the important role that cross-border investment flows play in the vitality of the American economy, and this Executive Order is intended to narrowly protect our national security interests while maintaining this long-term commitment to open investment.”
As part of Biden’s order, the Treasury Department plans to completely ban private equity firms, venture capital funds and other entities located in the United States from making certain investments, while requiring investors to notify it in advance of other transactions, according to administration officials.
The Treasury Department will soon begin the rulemaking process to better define the scope of the restrictions, according to the officials, who also noted that the administration engaged with more than 175 stakeholders before moving forward. This process will include a period allowing the public, including lawmakers and affected industries, to comment.
An official said the rule is not expected to come into effect until next year.
“What we are talking about is a narrow and measured approach, where we seek to prevent the People’s Republic of China from acquiring and using the latest technology to promote military modernization and undermine US national security,” said one of the officials. name.
In response, the Chinese Embassy in Washington issued a statement from the Ministry of Commerce that the restrictions were politicized and hostile to business, insisting there were no military or national security concerns.
The ministry also indicated that China could retaliate but called for economic cooperation between the two countries.
ABC News’ Carson Yu contributed to this report.
This article originally appeared on abcnews.go.com