2023-08-09 22:12:00
Joe Biden
Relations between the US and China are strained.
(Photo: AP)
Washington The US government wants to regulate certain investments from the United States in China to protect sensitive technologies. President Joe Biden issued a decree on Wednesday. “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.
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 directed against “questionable countries” – but only China is expressly mentioned. At its core, it is about ensuring that capital from the United States does not flow on a large scale into industries in rival countries 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 the knowledge.” The scheme follows a similar mechanism whereby certain large foreign investments in the US in sensitive areas are pre-screened.
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.
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