Biden will restrict US companies from investing in China in May

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Author：netwing Time：2023-04-24 Browse：

Foreign media reported on Thursday, citing sources, that the Biden administration plans to issue an executive order next month to restrict American companies from investing in China, involving key economic sectors such as chips, artificial intelligence (AI), and quantum investment
According to Bloomberg, people familiar with the internal review process said on Thursday local time that the Biden administration plans to issue an executive order next month to restrict US companies from investing in China, involving key economic sectors such as chips, artificial intelligence (AI), and quantum investment.
According to reports, the restricted areas for US companies to invest in key areas of the Chinese economy will include venture capital, private equity, and certain forms of technology transfer and joint ventures, and certain types of investment will be completely prohibited.
It is understood that the executive order will cover the fields of semiconductors, artificial intelligence, and quantum computing - with a focus on investments in which US companies play an active role in management. This includes venture capital and private equity, as well as certain forms of technology transfer and joint ventures. Officials involved in drafting the order stated that it targets potential new investments rather than existing ones.
Sources have revealed that the executive order may be issued before and after the G7 summit, and the United States hopes to receive support from G7 allies.
US officials point out that these investment restrictions are aimed at cutting off key funds and technologies that are seen as potentially enhancing China's military capabilities. However, unilateral measures will not achieve national security goals, as investment from other countries in China may replace the US investment that the government is about to block. Therefore, the US government has been discussing relevant measures for nearly 2 years and plans to take action during the Group of Seven (G7) summit held in Hiroshima, Japan from May 19th.
According to PitchBook data, the trading share of US private equity investors purchasing shares of Chinese companies in 2022 has decreased to about a quarter of what it was ten years ago.
It is worth mentioning that a March report by The Wall Street Journal also mentioned that the Biden administration is preparing a new plan that may ban US investment in certain areas of China and is in contact with G7 allies to form alliances to counter China's technological ambitions.

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