Sensitive Technologies
Biden wants to regulate certain US investments in China
US President Joe Biden wants to regulate US investments in sensitive technologies in China. photo
© Alex Brandon/AP/dpa
There is great concern in Washington that the People’s Republic will upgrade its defense sector with the help of US investments. Now the Beijing government is throwing a spanner in the works.
The US government wants certain investments from the United States in Regulate China to protect sensitive technology.
President Joe Biden issued a decree on this. “We want to prevent China from acquiring and using the most advanced technologies to advance military modernization and undermine US national security,” said a government official in Washington. He made it clear that it was a measure to protect national security and not a brake on investment.
Certain investments could be prohibited
According to the US government, the following sectors will be affected: semiconductors, certain artificial intelligence systems and quantum information technologies. The latter enable the calculation of algorithms that are too complex for today’s computers. US investments in such sectors in China could be banned by the government in the future after examination. There should be a reporting requirement for certain investments.
The decree is aimed at “questionable countries” – although only China is expressly mentioned. The core issue is to ensure that capital from the United States does not flow into industrial sectors of rival countries on a large scale that are important to the national security of the United States – for example in the defense or technology sectors.
They want to prevent China from acquiring knowledge of the most advanced technologies and then using it to advance military modernization and undermine US national security, the US official said. The aim is also that existing export controls would not be undermined. It is not about preventing money from flowing to China. “China doesn’t need our money. (…) What they don’t have is knowledge.” The deal follows a similar mechanism whereby certain large foreign investments in the US in sensitive areas are pre-screened.
relationships severely strained
The relationship between the USA and China has long been tense, including economically. Biden left the punitive tariffs in place against the People’s Republic that his predecessor Donald Trump had introduced. The Democrat also launched large-scale investments in the United States to make America’s supply chains more independent – especially from China. The US also imposed export restrictions to deny the country access to American technology.
The USA and China are the two largest economies in the world – and as such, they are also closely intertwined. China is one of the three largest trading partners for the US, along with direct neighbors Canada and Mexico.