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US to ban investment in some Chinese sectors

US President Joe Biden (pictured) has signed an order that allows his administration to ban investment by US companies in Chinese firms involved in a number of “critical” sectors.

The order authorises the treasury secretary to regulate investments in three areas deemed critical to US national security: semiconductors and microelectronics; quantum information technologies; and artificial intelligence (AI).

A White House statement said that the plan would seek to prevent foreign countries of concern from “exploiting US investment in this narrow set of technologies that are critical to support their development of military, intelligence, surveillance, and cyber-enabled capabilities that risk US national security”.

The US already bans exports of some of these technologies to China.

Consultation

Under the proposals, US firms would also have to notify the US Treasury about any deals involving certain technologies in China.

While the US Department of the Treasury has published its proposals on the scope of the programme, there will be further consultation with the public and interested parties before the rules come into effect.

Senior administration officials described the move as “a national security action, not an economic one”, adding that the US recognised that cross-border investment flows had contributed to the US economy.

“This executive order protects our national-security interests in a narrowly targeted manner, while maintaining our longstanding commitment to open investment,” they said.

China said it was "very disappointed" by the move. The US "has continuously escalated suppression and restrictions on China," Liu Pengyu, a spokesperson for the Chinese embassy in Washington, told the BBC.