US plans limits on Chinese investment in US technology firms
WASHINGTON: The US Treasury Department is drafting curbs that would block firms with at least 25 per cent Chinese ownership from buying US companies with ‘industrially significant technology,’ a government official briefed on the matter said.
The official, whose comments matched a report by the Wall Street Journal, emphasised that the Chinese ownership threshold may change before the restrictions are announced on Friday.
The move marks another escalation of President Donald Trump’s trade conflict with China, which threatens to roil financial markets and dent global growth.
Tariffs on US$34 billion worth of Chinese goods, the first of a potential total of US$450 billion, are due to take effect on July 6 over US complaints that China is misappropriating US technology through joint venture rules and other policies.
The Treasury investment restrictions are expected to target key sectors, including several China is trying to develop as part of its ‘Made in China 2025’ industrial plan, the US official said.
Among its objectives, the plan aims to upgrade China’s capabilities in advanced information technology, aerospace, marine engineering, pharmaceuticals, advanced energy vehicles, robotics and other hightechnology industries.
The Wall Street Journal also said the US Commerce Department and National Security Council were proposing ‘enhanced’ export controls to keep such technologies from being shipped to China.
Spokespersons for the Treasury, Commerce Department and the White House did not immediately respond to Reuters’ requests for comment on the proposed restrictions.
The government official said the Treasury would invoke the International Emergency Economic Powers Act of 1977 (IEEPA) to devise the restrictions. — Reuters