Biden to ban US firms from investing in Chinese tech companies

The Biden administration has unveiled new regulations aimed at constraining US investments in advanced technology sectors within China, a move intended to safeguard national security during a period of heightened tensions with Beijing.

These fresh regulations would impose limitations on investments made by US private equity and venture capital firms, as well as joint ventures, in areas such as Chinese artificial intelligence, quantum computing, and semiconductors. The regulations are set to undergo a period of public comments.

Having been in development for an extended period, these new restrictions are designed to curtail the flow of American knowledge and funds to China, while simultaneously restricting the accessibility of cutting-edge technology for the Chinese military.

Officials who announced this move underscored their objective, emphasizing that it was aimed at preventing US capital from inadvertently aiding China's military capabilities, and not to inflict damage upon China's economy.

The officials made it clear that the main purpose of the executive order and upcoming regulations is to limit China's access to "intangible" assets like technical expertise and connections with experts, which often accompany investments from venture capital and private equity firms.

One senior official noted, "Ultimately, China doesn't need our money. They're a net capital exporter. So, the thing we're trying to prevent is not money going into China overall, because they have plenty of money; the thing they don't have is know-how."