U.S. to Ban Some Investments in China

livemint.com:

technology companies under an executive order the Biden administration will release Wednesday, escalating Washington’s efforts to prevent Beijing from developing cutting-edge technology for its military. The executive order is expected to cover direct investments in three technology sectors: semiconductors, quantum computing and artificial intelligence. It would prohibit investments in some forms of those technologies, while requiring Americans doing business in China to inform the U.S.

government about investments in the three high-tech sectors more broadly. Investors that violate those rules may face fines and be forced to divest themselves of their stakes, according to people familiar with the order. Before enforcing the new rules, the Biden administration is expected to accept feedback on them.

They are expected to apply to future transactions and won’t cover portfolio investments in Chinese stocks and bonds, according to the people. The rules are expected to technically also apply to investments into other adversaries such as Russia, but they are expected to only practically affect U.S. investment into China.

A Treasury spokesman declined to comment. The executive order is a product of a growing bipartisan concern that American technology and know-how could inadvertently help Beijing develop weapons it could use against the U.S. in a military conflict.

The Biden administration last year restricted exports of advanced semiconductors and chip-manufacturing equipment to China, and the U.S. has also heightened scrutiny of Chinese investment in American technology companies. While Biden administration officials have cast the moves as targeted efforts to protect U.S.