Biden thinks of new restrictions for American investments in China
US President Joe Biden on Wednesday announced plans for new restrictions on investments American companies can make overseas, the latest in a series of measures aimed at blunting China's access to technologies that could undermine national security of the United States
In a separate but related move, the White House declared “a national emergency to address the threat of development by countries of concern of sensitive technologies and products critical to those countries' military, intelligence, surveillance or cyber capabilities ”.
China, along with its special administrative regions of Hong Kong and Macao, is listed as the only country of concern in the emergency declaration.
The new restrictions in Biden's executive order are meant to limit U.S. venture capital and private equity investments in Chinese companies in three areas: "semiconductors and microelectronics, quantum information technologies, and some artificial intelligence systems," according to a senior Biden administration official who briefed reporters on Wednesday.
Intel had recently announced investments in the form of a Joint Venture in China for the creation of a sort of "School of AI" with the attached production of microchips. It will remain to be seen how this initiative will affect the American company.
The order also calls for the creation of an outward investment review mechanism "because our export controls do not offer overseas investment that can help foreign adversaries or countries of concern fuel domestic development of national security technologies," he said. said another administration official.
“By adding outbound investment screening to our suite of national security tools, we are enhancing the capabilities of the United States to safeguard our national security,” this official said.
The administration provides for a 45-day consultation period, seeking input from domestic stakeholders and allied countries, to refine and clarify the rules that will be put in place to achieve the order's goals.
To limit disruptions to normal capital flows between the two countries, the rules won't target "passive investments," such as stakes in publicly traded Chinese companies, a third senior official said.
Venture capital and private equity partners "connect people to experts," the official said. “They will link to each other at the various companies that are in their portfolio and that's what we're getting at.” What we want to stop, with these policies, are precisely the exchanges of know-how and knowledge in general in the most delicate sectors. Money can circulate, knowledge cannot.
Surely these measures will cause problems for many companies that invest in China, but they are part of Biden's latest strategy to contain Chinese economic and technological growth, it is not known how effective.
Thanks to our Telegram channel you can stay updated on the publication of new articles from Economic Scenarios.
The article Biden thinks of new restrictions for American investments in China comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/biden-pensa-a-nuove-limitazioni-per-gli-investimenti-americani-in-cina/ on Thu, 10 Aug 2023 07:30:00 +0000.