The Biden administration is planning to ban investments in some Chinese companies that are involved in the technology sector through an executive order on Wednesday, according to The Wall Street Journal.
The U.S. will restrict private-equity and venture capital firms from directly investing in some Chinese companies that operate in the semiconductor, quantum computing and artificial intelligence sectors, according to the WSJ. In October 2022, the Biden administration placed similar restrictions limiting Chinese access to American chip technology by blacklisting multiple Chinese semiconductor manufacturers from working with American companies. (RELATED: Top Chip Manufacturer Announces Layoffs Despite Biden Admin Subsidies To The Industry)
The new rules would require Americans doing business in China to inform the U.S. government about investments in those three sectors, according to the WSJ.
The executive order is expected to only apply to future transactions and will not cover portfolio investments in Chinese stocks and bonds, according to the WSJ. The restrictions are expected to apply to other U.S. adversaries like Russia, but without the same technology competition, the restrictions are expected to only practically affect investment in China.
The CHIPS and Science Act is bringing semiconductor manufacturing home again. pic.twitter.com/t6fqKboO2S
— The White House (@WhiteHouse) August 9, 2023
Three top U.S. semiconductor manufacturers, Intel, Qualcomm and Nvidia, quietly met with Biden administration officials, including Commerce Secretary Gina Raimondo, National Economic Council Director Lael Brainard and National Security Council Director Jake Sullivan, in July to discuss new restrictions that the White House was considering on the Chinese semiconductor industry.
China and the U.S. have been engaged in a competition over gaining an advantage in the semiconductor industry and artificial intelligence advancement. The U.S. has leveraged its intellectual property, while China has leveraged its access to raw resources, including the necessary minerals to build computer chips.
Xie Feng, the Chinese ambassador to the U.S., said at a security and foreign policy conference in July that the country will not back down from competition with the U.S. and noted that the country will retaliate to new restrictions.
The CHIPS and Science Act was signed into law in August 2022 and gave $52 billion in subsidies to domestic semiconductor manufacturers as a part of the push for the U.S. to gain an advantage in the chip industry.
The White House did not immediately respond to the Daily Caller News Foundation’s request for comment.
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