For a little while now the U.S government has been growing suspicious of the Chinese tech industry. After the grilling of TikTok’s CEO in congress followed by a proposal of restrictions on China’s cloud sector, Biden now seeks to entirely ban American investment in the Chinese tech industry. So how did we get here and why does the U.S government feel these actions are justified?
American Investors To Report Investments In Chinese Tech Industry
The US government will call for American companies to report the investments they make in the Chinese tech industry, banning such investments in some cases. This will give the government unprecedented power to screen foreign deals made even by private companies. While some worry they may be overstepping, the government has said the measure would be enacted sensitively.
This move is the latest update in the increasingly tense relationship between the two countries. According to the BBC, Chinese officials have said they are “very disappointed” by the decision. Liu Pengyu, a spokesperson for the Chinese embassy in Washington lamented that the US “has continuously escalated suppression and restrictions on China”.
Biden had made this decision as part of a wider policy to restrict American investment in companies from “countries of concern” working within quantum computing, advanced semiconductors and sub-sectors of AI.
The rules won’t come into effect immediately. We’re still awaiting a period of public comment where the boundaries of the proposed policy should become clearer. Officials have said the measure is a “national security action, not an economic one”.
While the US government may see this as a necessary defensive move in what is becoming an increasingly antagonistic international relationship, investors and business leaders worry about this new expansion of government oversight. Do you think this decision is worth the economic price? Or does it not go far enough?