US president Joe Biden signed an executive regulation on Wednesday 9 August, which limits any American investments in mainland China, Hong Kong and Macau in high-tech sectors specified as artificial intelligence, semiconductors and quantum technology.
This move, criticised by China, prohibits US people from making “certain transactions” in semiconductors and microelectronics, quantum information technologies and artificial intelligence, and requires them to notify the Treasury Department of specified transactions.
In the long awaited Implementing Regulation Biden announces
a state of emergency in the country due to “the countries of concern” that are rapidly developing “sensitive technologies”, which “highly increases their ability to conduct activities that endanger US national security”.
China, Hong Kong and Macau are the only countries mentioned as “country of concern” in the executive order.
The implementing regulation will be implemented by the Treasury Department in consultation with another agencies, including the Trade Department. The Treasury Department expects public comments on the implementation of the order.
Order “is a narrowly targeted action to defend national safety while maintaining our long-term commitment to open investment"– reads the message of the Treasury Department.
Department representatives informed that the Treasury Department would presume that it would release “some transactions, including possibly those concerning public-trade instruments and intra-company transfers from US parent companies to subsidiaries”.
The full of the action justifies convincing the U.S. administration that “as part of a comprehensive long-term strategy for developing delicate technologies and products, The PRC uses or has the anticipation to usage US investments to increase its capacity to produce a narrow set of delicate technologies of critical importance for military modernisation.’
The Chinese Ministry of Commerce present (Thursday, August 10) issued a message in which it criticised the United States for “a serious departure from the marketplace economy and fair competition rules that are constantly promoting”.
According to an anonymous typical of the ministry,
Washington's fresh decision “will influence business management decisions, destruct global economical and commercial procurement and seriously disrupt the safety of global industrial connections and supply chains.”
The Ministry expressed “serious concern”, while claiming that it reserves the right to take the essential measures without further explanation.
The thought of controlling investments to China has already been discussed. The 2018 abroad Investment hazard Review Act, passed under erstwhile president Donald Trump, initially contained provisions giving the abroad Investment Commission powers to review the investment activities of US companies outside the US.
However, the U.S. business environment led to the removal of specified rights from the bill. For this reason, 1 of the challenges faced by legislators in the creation of the Wednesday implementing regulation was to give it real effectiveness and at the same time to guarantee that it was not burdensome for the business community on which the financing of the presidential run depends.
The Implementing Regulation is the first act of wider action, which in a sense is Biden's consequence to the activities of Congressmen, who are focusing on the preparation of a much more restrictive law on the limits of investment of emerging American companies.
The executive order appeared on the anniversary of Biden signing a two-party bill CHIPS and discipline Actwhich contains restrictions on investment in the production of advanced semiconductors in China.
Investment constraints in China are expected to increase tensions between Washington and Beijing. The United States issued respective export bans to limit the access of any Chinese companies to advanced AI chips and chip production equipment.
The Treasury Department reported that the fresh National safety Programme “will prevent US investments from speeding up the creation of US technology counterparts in the PRC, undermining the effectiveness of existing export control instruments and investment control programmes, which besides aim to defend US national security”.
Leszek B. Glass
Email: [email protected]
© www.chiny24.com
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