US to curb tech transfer to China
Washington, March 5: The Biden administration is nearing completion of an executive order that would restrict investments by US companies in parts of the Chinese economy, including advanced technologies that could enhance China’s military and intelligence capabilities, people familiar with the matter said.
The effort is at an advanced stage, with President Joe Biden prepared to request funding for it in his March 9 fiscal 2024 budget, according to reports to Congress obtained by Bloomberg.
The order would add to the administration’s toolkit to address concern about China’s technological advances, which includes export controls on advanced semiconductors and new guidance on screening Chinese investments in the US.
While working on the policies, officials discovered that US investments in China often come with intangible benefits such as managerial and technical expertise that can help Chinese firms grow quickly, the people said.
The restrictions are meant to capture investments in projects that have clear national-security applications, including artificial intelligence and code-breaking technologies.
United States companies currently face no US government restrictions on investing in China’s tech sector. Some have invested in Chinese companies that are developing cuttingedge supercomputing capabilities and other technologies that can be used in military applications.
The administration is working with allies and partners to develop the program and submitted two reports to Congress on Friday outlining what it would cost to set up a socalled outbound investment program with the treasury department.