Biden restricts US investments in Chinese technology

In a sign of growing strains between the world's two biggest powers, President Joe Biden signed an executive order that would block and regulate high-tech US-based investments in China.

The order signed on Wednesday covers advanced computer chips, microelectronics, quantum information technologies and artificial intelligence.

Senior administration officials said that the effort stemmed from national security goals, rather than economic interests and that the categories it covered were narrow in scope.

The order seeks to blunt China's ability to use US investments in its technology companies to upgrade its military while also preserving broader levels of trade that are vital for both nations' economies.

The United States and China appear to be increasingly locked in a geopolitical competition, along with their deep trade relationship as the world's two largest economies.

Biden administration officials have insisted that they have no interest in “decoupling” from China, yet the US has limited the export of advanced computer chips, sought to limit investments into China and kept the expanded tariffs set up by former president Donald Trump.

'China struggling'

Biden has suggested that China's economy is struggling and its global ambitions have been tempered as the US has reenergised its alliances with Japan, South Korea, Australia and the European Union.

The administration consulted with allies and industry in shaping the executive order.

The officials previewing the order said that China has exploited US investments to support the development of weapons and modernise its military.

The new limits would complement the export controls on advanced computer chips that were announced last year.

The Treasury Department, which would monitor the investments, will announce a proposed rulemaking with definitions that would conform to the presidential order and go through a public comment process.

The goals of the order would be to have investors notify the US government about certain types of transactions with China as well as to place prohibitions on some investments.

Officials said the order is focused on areas such as private equity, venture capital and joint partnerships in which the investments could possibly give countries of concern such as China additional knowledge and capabilities regarding their military.