Biden orders restrictions on U.S. investments in Chinese technology

President Joe Biden has signed an executive order restricting U.S. investments into Chinese technology, citing national security aims.

The move: The order regulates investments towards China in areas such as advanced computer chips, microelectronics, quantum information technologies, and artificial intelligence.
* It aims to curb China’s use of U.S. investments to bolster its military technology, whilst maintaining broader, economically significant levels of trade.
* The Treasury Department will oversee the investments and will reveal a proposed rulemaking to adhere to the presidential order following a public comment process.

Bipartisan backing: In July, by a vote of 91-6, the Senate made an amendment to the National Defense Authorization Act requiring monitoring and limitations on investments in countries of concern, including China.
* Mixed reactions followed the announcement of Biden’s executive order, with some officials saying more needs to be done.

China-U.S. tension: The economic and geopolitical competition between the U.S. and China has increasingly intensified.
* Biden has critiqued China’s global ambitions and economic struggles, with China’s behavior towards Taiwan and support for Russia amid the Ukraine invasion worsening relations.

Economic decline: China’s once-robust economic growth has faltered post-pandemic and declines in foreign direct investment have been observed.
* Consumer prices fell by 0.3% compared to the previous year in July, highlighting a lack of domestic demand.
* Foreign direct investment dropped by 89% from the previous year in the second quarter to $4.9 billion.

Global shift: China’s stricter security controls and unfulfilled promises of reforms have caused lost confidence among foreign companies.
* Many global firms are reportedly diverting investment plans to other economies.

View original article on NPR

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