US Tightens Grip on Tech Investments in China

The US Treasury Department introduced a rule to restrict American investments in Chinese technology sectors like AI, computer chips, and quantum computing. This action aims to prevent the Chinese military from gaining technological advantages. The rule will take effect from January 2, following an executive order by President Biden.

The United States has unveiled a new rule to limit American investments in Chinese advancements such as artificial intelligence, computer chips, and quantum computing, sectors deemed crucial for maintaining military superiority. This move follows an executive order issued by President Joe Biden in August 2023 aimed at restricting access to technologies potentially useful for developing advanced military capabilities.

Set to take effect from January 2, the rule is part of a broader policy to curb China's technological progress amidst growing geopolitical tensions. The assistant Treasury secretary for investment security, Paul Rosen, emphasized the significance of these investments, stating that they could provide benefits beyond mere financial support, including managerial expertise and access to top talent, which could inadvertently aid China's military ambitions.

This strategic decision has garnered rare bipartisan support in Washington but sparked diplomatic tensions with China, as its Foreign Ministry firmly opposes the US's restrictive measures. Meanwhile, concerns were raised about the move's potential impact on the global supply chain and on American businesses, which have historically enjoyed a trade surplus with Hong Kong.

(With inputs from agencies.)