According to The Wall Street Journal, the US government is preparing a new programme that could prohibit US investment in certain areas of China.
The Biden administration’s decision is a new step in defending US technological advantages in a growing competition between the two countries. According to the reports, the US government may prohibit certain investments while also gathering information about other investments to inform future steps. The reports made no mention of specific technology sectors deemed risky by the Biden administration. However, the report stated that sectors that could advance rivals’ military capabilities would be a focus of the programme, according to The Wall Street Journal.
According to a report from the US Treasury Department, the programme would focus on “preventing US capital and expertise from being exploited in ways that threaten our national security while not imposing an undue burden on US investors and businesses,” according to the news report.
The names of the countries subject to the new rules were not mentioned in the reports. People familiar with the matter, however, believe that the Biden administration’s work on the new rules will focus primarily on US investments in China.
According to the report, the US Treasury and Commerce departments expect to finalise their policy on the issue in the near future. According to the news report, the two agencies said they expected to seek additional resources for the investment programme in the White House budget, which is set to be released next week.
The US government announced export restrictions on advanced semiconductors and chip-manufacturing equipment in 2022, with the goal of slowing China’s military advance. According to people familiar with the situation, the US government has been working on an executive order establishing the new investment rules for months.