US clamps down on investment in Chinese tech companies

Subscribe to enjoy similar stories. WASHINGTON—President Trump signed into law new powers to screen and restrict U.S. investment in Chinese technology firms, marking the most significant effort yet to police how American capital flows into businesses that bolster Beijing’s military and surveillance state.

Lawmakers in both parties have grown increasingly concerned that U.S. money and expertise are accelerating China’s advances in cutting-edge technologies. The outbound-investment provisions, part of the annual National Defense Authorization Act, cites entities in China and other countries of concern—including Cuba, North Korea, Venezuela and Russia—that develop “dual-use" technologies with both commercial and military applications.

Lawmakers argue that curtailing U.S. investment in those areas is critical to American national-security and foreign-policy interests. “Investments propping up Communist China’s aggression must come to an end," House Speaker Mike Johnson (R., La.) said earlier this month.

The NDAA was passed by the House last week and the Senate on Wednesday, both by large bipartisan majorities. The legislation cements a Biden administration executive order in 2023 that initiated the first U.S. attempt to screen outbound capital.

But where the White House acted under emergency authorities, Congress is now codifying and expanding those powers—to monitor, and in some cases block, U.S. financing of Chinese work on emerging technologies including artificial intelligence, quantum computing and advanced semiconductors. “This is the furthest this has gotten in the legislative process," said Emily Kilcrease, a director at the Center for a New American Security who helped coordinate investment and national security