Fund managers fret over the fallout of Joe Biden's China tech restrictions
The executive order regulates US investments in China in sensitive technologies. Investors, advisers and an administration official said it is tailored around national security and reflects months of consultations with industry and other stakeholders. Even so, the order, while narrow in scope as expected, is unprecedented.
It sets a new framework for outbound capital controls, making it easier to add areas to it in the future. It is also spurring rhetoric in Washington. Some lawmakers are calling for more restrictions, with a congressional panel opening a probe into asset manager Blackrock and index provider MSCI over Chinese investments.
For US investors trying to navigate the geopolitics, the noise in Washington is making it hard to determine what they should be doing in China. The executive order along with anti-China moves by lawmakers and agencies means the overall policy is unclear and riddled with landmines. China is making it harder for businesses, too.
The uncertainty is likely to hit investment flows further and add to the urgency of contingency planning. «The executive order in and of itself is establishing a framework for further action,» said Anthony Rapa, co-chair of law firm Blank Rome's international trade practice group. «It will be very important to monitor how this executive order is being received in Congress.» An administration official said there were no immediate plans to add additional sectors or countries to the order.
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