The White House on Wednesday will detail its plans to ban some U.S. investments in sensitive technology in China.
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The White House on Wednesday will detail its plans to ban some U.S. investments in sensitive technology in China, and require that the federal government be notified of other investments, a senior government source told Reuters.
The plans are aimed toward stopping U.S. capital and expertise from helping develop technologies that would support China’s military modernization and threaten U.S. national security.
Reuters reported on Friday that President Joe Biden was expected to soon issue a the long-awaited executive order to screen outbound investments in sensitive technologies to China this week.
The senior government source said that order is anticipated Wednesday. The White House declined to comment on Tuesday.
Biden administration officials have stressed for months any restrictions on U.S. investment in China can be narrowly targeted.
“These are tailored measures,” National Security Adviser Jake Sullivan said in April. “They usually are not, as Beijing says, a ‘technology blockade.'”
U.S. Commerce Secretary Gina Raimondo said in March the administration didn’t “wish to be overly broad…. Anything that is overly broad hurts American employees and the economy.”
The administration is anticipated to focus on lively investment resembling U.S. private equity, enterprise capital and three way partnership investments in China in semiconductors, quantum computing and artificial intelligence.
Most investments captured by the order would require that the federal government be notified about them, sources have said. Some transactions can be prohibited.
The Latest York Times reported on Tuesday that the Biden administration plans to require firms making investments in a broader range of Chinese industries to report that activity, which can give the U.S. government great visibility into financial transactions between america and China.
Sources previously told Reuters investments in semiconductors that can be restricted are expected to trace export control rules for China issued by the U.S. Department of Commerce in October.
Emily Benson, of the Center for Strategic and International Studies (CSIS), a bipartisan policy research organization, said she expects investments in artificial intelligence to be prohibited to military users and uses, and that other investments within the sector will only require notification to the federal government.
Benson said the burden will fall on the administration to find out what AI falls into the military category.
“They may should draw a line of what constitutes a military application of AI, and to define AI,” said Benson, director of CSIS’s project on trade and technology.
Biden’s order is anticipated to direct publication of a notice of proposed rule-making. It isn’t expected to take effect immediately and to offer for a comment period to contemplate industry feedback before being finalized.
