The U.S. Treasury Department has introduced final rules restricting investments in advanced technologies in China, such as artificial intelligence, semiconductors, and quantum computing, citing national security concerns.
The new regulations, effective January 2, ban U.S. citizens, residents, and companies from participating in transactions that might bolster China’s military or intelligence capabilities. Additionally, U.S. investors must notify the Treasury about investments in less advanced tech sectors that could still pose security risks.
Paul Rosen, assistant secretary for investment security, emphasized that U.S. capital should not be used to advance technologies by foreign adversaries. “US investments, including the intangible benefits like managerial assistance and access to investment and talent networks… must not be used to help countries of concern develop their military, intelligence, and cyber capabilities,” Rosen stated.
The curbs follow President Biden’s 2022 executive order aimed at sensitive technologies that could aid foreign militaries. At the time, Biden warned of the dangers posed by adversaries using U.S. investments for military modernization, surveillance, or cyber tools.
China’s Ministry of Foreign Affairs criticized the restrictions, accusing the U.S. of “anti-globalization and de-sinicization” and expressing its strong dissatisfaction. Beijing officially lodged complaints, stating that it “firmly opposes the United States’ insistence on introducing restrictions on investment in China.”
This latest effort aligns with the broader U.S. strategy to prevent critical technologies from advancing the military capabilities of foreign competitors and adversaries.