US government to restrict investments in China's high-tech sectors to
safeguard national security

Date:
Sat, 14 Dec 2024 16:05:00 +0000

Description:
As tensions escalate between the U.S. and China, new investment restrictions target critical technologies like AI and semiconductors.

FULL STORY

The US government has issued new rules looking to restrict outbound
investments in Chinas high-tech industries.

The regulations, managed by the Treasury Department, are expected to require companies to notify the government of investments in sensitive technologies.

These sensitive technologies include areas such as artificial intelligence (AI), semiconductors, microelectronics, and quantum computing, particularly when these technologies could be used to advance military capabilities.

Biden administration focuses on National Security

These new rules are not entirely new as they build upon existing
restrictions. In October 2022, the US implemented export controls to block China's access to advanced semiconductor technologies, especially those essential for AI development. These export controls came alongside earlier tariff hikes on Chinese imports.

The U.S. government has been widening its efforts to curb the transfer of
U.S. capital and expertise into China, addressing concerns over national security and military competition.

In 2018, the Trump administration initiated tariffs on Chinese goods and
began restricting Chinese investments in US technology sectors, citing
concerns over "forced technology transfer" and the potential military applications of advanced technologies.

Under the Biden administration, this did not change as the U.S. seeks to prevent technology and investments from supporting Chinas military modernization, which officials worry could undermine Americas strategic interests.

The Treasury has been working on these restrictions since mid-2023, when it released initial proposals to potentially ban certain investments in China.
The initial proposals drew public feedback from citizens and businesses, helping the department refine the scope of the rules.

The finalized regulations , outlined by the Department of the Treasury's
Office of Investment Security are expected to strike a balance between protecting U.S. security interests and avoiding unnecessary disruption to commercial relations.

The potential military, intelligence, surveillance, and cyber-enabled applications of these technologies and products pose risks to U.S. national security particularly when developed by a country of concern such as the PRC, the Treasury Department notification said.

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Link to news story: https://www.techradar.com/pro/US-government-to-restrict-investments-in-Chinas- high-tech-sectors-to-safeguard-national-security

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