US cements rule to limit high-tech investments to China

The Treasury Department cemented a final rule on Monday that limits those in the United States from investing in certain technologies to China that could bolster the nation’s military and threaten U.S. national security.

The rule builds upon President Biden’s executive order issued in August 2023 that blocked Americans from investing in Chinese sectors due to the chance the investments could improve the country’s military or intelligence capabilities.

The technology covered in the rule includes semiconductors and microelectronics, quantum information technologies and artificial intelligence, all of which “pose a particularly acute national security risk to the United States,” senior administration officials told reporters Monday.

“Artificial intelligence, semiconductors, and quantum technologies are fundamental cybersecurity applications like cutting-edge code-breaking computer systems or next-generation fighter jets,” wrote Paul Rosen, the assistant secretary of Treasury for investment security.

The final rule lays out “operative regulations and a detailed explanatory discussion” on their purpose and use, the Treasury Department said.

“The People’s Republic of China has a stated goal, as you know, to develop key sensitive technologies that will directly support the PRC’s military modernization and related activities, including weapons development, and has exploited U.S. investments to develop domestic military and intelligence capabilities,” an administration official said, using an abbreviation for People’s Republic of China (PRC).

Under the final rule, individuals in the U.S. will be required to notify the Treasury Department of certain other transactions involving the covered technology that potentially pose a threat to national security.

The move marks the Biden administration’s latest attempt to curb technology developments by China and prevent the nation from having a military or technological edge over the U.S.

Contention between the U.S. and China has flared up in recent years regarding multiple issues — including the U.S. government’s sanctions on Chinese citizens and officials, restricted imports of Chinese semiconductors, the debate over the Chinese-owned social media platform TikTok, and Taiwan.

In May, Biden ordered the closure of a Chinese-backed cryptocurrency mine near a Wyoming nuclear missile base, citing a risk to national security.

Updated at 5:38 p.m. EST.

Source: The Hill