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U.S. Will Impose Restrictions on Investments in Sensitive Technologies in China

Client Updates / Aug 30, 2023

Written by Haim Ravia and Dotan Hammer

The President of the United States, Joe Biden, issued a presidential order directing the departments of Treasury and Commerce to formulate regulations that will impose limitations on American investments in technology companies and ventures in China, specifically those related to artificial intelligence, quantum computing, and semiconductors.

According to officials, the primary objective of Biden’s executive order is not to curtail the flow of venture capital funds, but primarily to restrict Chinese access to the forefront of American knowledge and connections with American experts which often accompanies capital investments. The U.S. administration’s intention behind these measures is to reinforce safeguards of U.S. national security against the leakage of sensitive civilian technology. The U.S. government is concerned that sensitive technology could be repurposed for military applications in China. This effort also aims to prevent the exploitation of these technologies against American interests.

Senior officials within the American administration also emphasized that the presidential order does not seek to undermine the Chinese economy. Instead, its focus is deliberately narrow, intended solely to prevent any harm to U.S. national security. In response, China has criticized the order, highlighting that it contradicts the principles that foster a free economy.

Click here to read the Executive Order on Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concern.