White House Plans to Impose New Economic Investment Restrictions On China

(TheConservativeTimes.org) – The Biden administration plans to issue a new rule Wednesday, August 9 intended to curb investment in certain sectors of technology in China, according to a report by The New York Times.

Such a measure would be one of the first steps the U.S. has taken to crack down on outgoing investments into Chinese technologies, and could be the first in a potential future series of investment restrictions as tensions between the two countries continue to grow and disagreements over American-Chinese trade increase.

The restrictions would prohibit investments from private equity and venture capital firms into certain sectors of the Chinese economy, such as quantum computing or artificial intelligence (AI), according to people familiar with the subject who told The Times. The measure represents an attempt to stop the exportation of American technological expertise and money to China.

The measure would also require these firms to report any investment in a broader range of Chinese industries, which is intended to provide the federal government greater visibility into the financial and technological exchanges between China and the U.S.

Emily Benson, the director of the Washington think tank Center for Strategic and International Studies, said that there is “mounting evidence” that U.S. capital is being used by China to further advance its military capabilities, and that as of now, the U.S. lacks a meaningful way of combating this activity.

The Chinese government has also long restricted foreign investments into certain areas of other countries’ economies, specifically the U.S., to ensure that it doesn’t leak capital into other countries. Other countries such as South Korea and Taiwan also have similar restrictions in place.

In recent years due to declining relations, both the U.S. and China have severed economic ties with one another. However, investment and venture capital firms have still attempted to make their own individual connections with their counterparts in China in order to gain access to lucrative investment prospects.

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