The Biden administration is finalizing new rules to restrict U.S. investments in China’s technology sectors, including artificial intelligence, which pose national security risks. The regulations, initially proposed by the U.S. Treasury in June, follow President Joe Biden’s executive order in August 2023 and target three critical areas: semiconductors, microelectronics, quantum information technologies, and specific AI systems.
Effective from January 2, the rules will be enforced by the Treasury’s new Office of Global Transactions. Treasury officials describe these technologies as fundamental to advanced military, cybersecurity, surveillance, and intelligence systems. Senior Treasury official Paul Rosen emphasized that “U.S. investments, including non-financial benefits such as managerial guidance and talent networks, should not bolster the military, intelligence, and cyber capabilities of rival nations.”
This rule is part of a broader U.S. strategy to limit technological support that could aid China’s military and economic aspirations. Earlier this year, Commerce Secretary Gina Raimondo highlighted the importance of preventing China from advancing its military technologies.
The new rules allow U.S. investments in publicly traded securities but build on existing authority to limit dealings with specified Chinese firms. In response, China’s Foreign Ministry condemned the measure as “anti-globalization and de-sinicization,” expressing strong dissatisfaction and vowing to protect its interests.
