In this illustration taken on February 17, 2023, a Chinese flag is displayed next to a “Made in China” logo on a printed circuit board with semiconductor wafers.
Florence | Reuters
The Biden administration said on Monday it was finalizing rules to limit U.S. investment in Chinese artificial intelligence and other technologies that could threaten U.S. national security.
The rules, proposed by the U.S. Treasury Department in June and guided by an executive order signed by President Joe Biden in August 2023, cover three key areas: semiconductors and microelectronics, quantum information technology, and certain artificial intelligence systems.
The new rules will take effect on January 2 and will be overseen by the Treasury Department’s new Office of Global Transactions.
“Narrow technologies are at the heart of the next generation of military, cybersecurity, surveillance and intelligence applications,” the Treasury Department said.
Paul Rosen, a senior Treasury official, added that the rule covers technologies such as “sophisticated password-cracking computer systems or next-generation fighter jets.”
He added that “U.S. investments, including intangible benefits such as management assistance, investment and talent networks, that often accompany such capital flows must not be used to help the country in question develop its military, intelligence and cyber capabilities.”
The rule is part of a broader effort to prevent U.S. technology from helping China develop cutting-edge technology and dominate global markets.
U.S. Commerce Secretary Gina Raimondo said earlier this year that the rules were critical to preventing China from developing military-related technology.
The new rules include a provision that would allow U.S. investments in publicly traded securities, but officials said the U.S. already had the authority to ban the buying and selling of securities of certain designated Chinese companies under previous executive orders.
The House Select Committee on China has criticized major U.S. index providers for directing billions of U.S. investors’ money into shares of Chinese companies that the U.S. believes are promoting China’s military development.
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