The Biden administration is set to tighten rules on certain U.S. corporate investments overseas in a bid to limit China’s ability to acquire technologies that could improve its military capabilities, a U.S. official said. makes discussions.
President Joe Biden’s executive order, expected to be released soon, will limit U.S. investment in advanced technologies that are used in the area of national security, an official said on condition of anonymity, as he is not was not allowed to comment. Among the technologies targeted, some could help China improve the speed and accuracy of military decision-making.
The expected executive order is the White House’s latest effort to target China’s military and technology sectors amid increasingly strained relations between the world’s two largest economies.
Strained relationship
In October, the Biden administration imposed export controls to limit China’s ability to access microchips, which it says can be used to make weapons, commit human rights abuses and improve the speed and accuracy of its military logistics.
The relationship between the two powers has grown even more strained in recent weeks after the United States shot down a Chinese spy balloon that flew across the country last month. The Biden administration has also released US intelligence findings that raise concern that Beijing is considering supplying Russia with weapons for its war on Ukraine.
Tensions also surfaced as senior G20 diplomats ended a contentious meeting in New Delhi on Thursday with no consensus on the war in Ukraine amid concerns about China’s growing global influence.
Meanwhile, China last week lambasted the new House of Representatives Select Committee on the Chinese Communist Party after it held its first hearing on curbing Beijing’s influence. Foreign Ministry spokesman Mao Ning called on its members to “reject their ideological bias and win-lose Cold War mentality”.
Administration officials consulted with allies as they worked to formulate new regulations on U.S. investments, according to the official.
Business reluctance
THE wall street journal revealed on Saturday that the Treasury and Commerce Departments on Friday delivered reports to lawmakers detailing plans for the new regulatory system to respond to U.S. overseas investment in cutting-edge technology. The agencies said they expected to seek additional funding for the White House Budget Investment Screening Program, which is expected to be released on March 9, according to the newspaper.
A spokesperson for the White House National Security Council declined to comment on the Treasury and Commerce reports, but noted that administration officials have kept Congress informed of its progress in developing an approach to overseas investment.
The expected action is certain to be met with reluctance from US companies. Administration officials have sought to signal to the business community that while they seek to review rules on U.S. investment in China, they are careful not to go overboard.
“One of the most important things we can do, from my point of view, is to make sure that we draw clear lines between what is competitive and what is national security because, fundamentally, I thinks the United States does well when we compete on a level playing field with any country in the world, Deputy Treasury Secretary Wally Adeyemo said at a recent Council event on Foreign Relations. But we also want, in the interstices where we see a national security risk, to be able to use the tools at our disposal to protect the national security of the United States of America. »
Last year, a bipartisan group of lawmakers urged President Biden to implement a tougher screening system for investments in foreign adversaries, with China at the forefront.