The White House is set to announce plans to restrict certain U.S. investments in sensitive technology in China and require government notification for other investments, according to a senior government source. The move is aimed at preventing U.S. capital and expertise from aiding China’s military modernization efforts and posing a threat to U.S. national security. The executive order, expected to be issued by President Joe Biden this week, will target active investments in semiconductors and microelectronics, quantum computing, and artificial intelligence. While most investments will require government notification, some transactions will be prohibited. The Biden administration has emphasized that the restrictions will be narrowly targeted and not a complete technology blockade. The regulations will only apply to future investments and are expected to be implemented next year after a period of public comment. The administration plans to issue an advanced notice of proposed rulemaking to further define the scope of the program. The restrictions are unlikely to cover passive or securities investments. The Biden administration also intends to require firms investing in a broader range of Chinese industries to report their activity, providing greater visibility into financial transactions between the U.S. and China. Investments in semiconductors that will be restricted are expected to align with export control rules issued by the U.S. Department of Commerce. Investments in artificial intelligence are expected to be prohibited for military users and uses, while other investments in the sector will only require government notification. The regulations concerning AI and quantum computing are still being developed, with potential exemptions for universities and research.
What industries will the forthcoming executive order specifically target, and what will be the restrictions or notification requirements for investments in these sectors
The White House is gearing up to unveil a new set of measures aimed at curbing certain U.S. investments in sensitive technology within China, as well as mandating government notification for other investments, a senior government source reveals. The objective behind this move is to prevent U.S. capital and expertise from inadvertently supporting China’s military modernization efforts, which could pose a threat to U.S. national security.
The forthcoming executive order, anticipated to be issued by President Joe Biden in the coming week, will specifically target active investments in areas like semiconductors and microelectronics, quantum computing, and artificial intelligence. While most investments will necessitate government notification, some transactions will be outright prohibited. The Biden administration has underscored that the restrictions will be laser-focused, rather than constituting a comprehensive technology blockade.
It’s crucial to note that these regulations will solely apply to future investments and are projected to be implemented next year following a period of public input. The administration is planning to issue an advanced notice of proposed rulemaking to further refine the framework of this program. It is unlikely that these restrictions will cover passive or securities investments.
Furthermore, the Biden administration plans to mandate companies investing in a broader range of Chinese industries to report their activities. This will provide enhanced transparency and insight into financial transactions between the U.S. and China.
As far as specific industries go, investments in semiconductors that will be restricted are expected to align with export control guidelines issued by the U.S. Department of Commerce. When it comes to artificial intelligence, investments are anticipated to be prohibited for military users and uses, while other investments in the sector will only necessitate government notification. The regulations pertaining to AI and quantum computing are still in the developmental stage, with potential exemptions intended for universities and research entities.
Overall, these measures aim to strike a balance between safeguarding U.S. national security interests and maintaining certain levels of cooperation and collaboration with China. By honing in on specific areas of concern, the White House hopes to limit potential risks while not completely severing ties in the realm of technology.
