Explainer-US starts process to restrict some investment in key tech in China
By Andrea Shalal and Karen Freifeld
(Reuters) — The White House on Wednesday moved to start prohibiting some U.S. investments in certain sensitive technologies in China, and requiring government notification of other investments, but said it would take time before the moves take effect.
President Joe Biden on Wednesday signed an executive order directing the U.S. Treasury Department to regulate certain U.S. investments in semiconductors and microelectronics, quantum computing and artificial intelligence.
Following are some key details:
'COUNTRIES OF CONCERN'
The order lays out plans to regulate investments in certain «countries of concern,» with a separate annex naming China, Hong Kong and Macau as initial targets. Further countries could be added later, a senior administration official told Reuters.
The outbound investment program would require notification of many investments while prohibiting only a few. Officials said the goal is to avert the «most acute» national security risks by regulating investments in Chinese companies and entities in areas that could give China military and intelligence advantages.
The rules will not be retroactive, applying only to future investments, an administration official said.
The United States already bans or restricts the export to China of many technologies and products under consideration for the new program, but restricting investment would prevent U.S. funds from helping China cement its own domestic capabilities, which could undermine existing export controls and inbound investment screening programs.
RULEMAKING PROCESS
Along with Biden's order, Treasury issued an advance notice of proposed rulemaking, which will allow companies and investors time to comment before it moves
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