Aiming to safeguard national security and curb military advancements in nations deemed risky, the US is set to implement rules limiting investments in Chinese technologies.
On Monday, the US government announced that it is finalising regulations to restrict investments in artificial intelligence and other technology sectors in China that pose risks to national security.
A senior official at the Treasury noted that the regulations encompass advanced technologies, such as next-generation fighter jets and code-breaking systems. He stressed that U.S. investments, including the associated managerial and talent benefits, should not aid countries of concern in enhancing their military, intelligence, or cyber capabilities.
Initially proposed by the U.S. Treasury in June, these rules stem from an executive order signed by President Joe Biden in August 2023. They focus on three critical areas: semiconductors and microelectronics, quantum information technologies, and specific AI systems.
Effective January 2, the Treasury’s newly established Office of Global Transactions will manage the new regulations. The Treasury stated that this limited set of technologies is essential for future military, cybersecurity, surveillance, and intelligence applications.
Furthermore, this initiative is part of a larger effort to prevent American expertise from enabling China to advance its sophisticated technologies and gain dominance in global markets. Commerce Secretary Gina Raimondo previously stated that these rules are vital to stopping the development of military-related technologies in China.
The new regulations, however, allow U.S. investment in publicly traded securities but also clarify that existing authorities already restrict trading in stocks of specific designated Chinese companies.
The House Select Committee on China has recently criticised major US index providers for funnelling billions from U.S. investors into Chinese companies believed to be supporting China’s military development.
