President Joe Biden is poised to sign an executive order that would prohibit American companies from investing in Chinese firms involved with developing sensitive technologies.
The nation’s leadership has grown increasingly concerned over Chinese aggression after a spy balloon traversed the country last week. The White House has largely finished preparations for an executive order that would ban American funds from enabling the development of Chinese advanced semiconductors, quantum computing, artificial intelligence, and other technologies with surveillance and military applications, according to a report from The New York Times.
Biden administration officials, including Treasury Secretary Janet Yellen, have spent months contacting industry leaders and think tanks to aid with forecasting the economic implications of the executive order, according to a report from Axios released last month. Although many officials are worried about the Chinese abuse of biotechnology, the sector would tentatively be omitted from the executive order along with battery technology.
Republican and Democratic lawmakers threatened last week to issue investment restrictions of their own if the White House did not move forward with their plans.
Regulators have already moved in recent months to limit the extent to which American and Chinese technology interests are intertwined. A final rule published last year by the Federal Communications Commission likewise prohibited Huawei, ZTE, Hikvision, and Dahua from importing and selling certain technologies considered a potential threat to national security. The new rule, however, does not apply to products currently within the nation’s borders.
Trade restrictions between the United States and China are perennially inhibited by the magnitude of the two nations’ economic interdependence. China was the largest supplier of goods imports to the United States in 2020, according to data from the Office of the United States Trade Representative, while China was the third largest goods export market for the United States. With respect to foreign direct investment, American companies held $124 billion in Chinese stocks as of 2020, while Chinese firms held $38 billion in American stocks.
Some industry leaders and investors have raised their concerns directly with senior administration officials. General Atlantic CEO Bill Ford has discussed his views with Commerce Secretary Gina Raimondo; the private equity firm has invested $7 billion in China since 2000.
The White House had reportedly been waiting to release the executive order until Secretary of State Antony Blinken returned from his scheduled diplomatic trip to China. The official canceled the mission after the Chinese surveillance balloon came to public consciousness.
The vessel traveled over Montana, the location of several military bases and missile silos, and then moved across the country before a fighter jet shot the object down off the coast of the Carolinas. Federal officials previously investigated Chinese technology company Huawei over the possibility that cell towers in Montana using the firm’s devices transmit military data to the communist nation.
Lawmakers and regulators at the state and federal levels have also voiced concerns over TikTok, the social media platform created by Chinese technology firm ByteDance, and the company’s efforts to gather sensitive information from consumers. Biden recently signed legislation banning TikTok from all devices owned by the federal government; several states, including Nebraska, Alabama, and North Dakota, had previously banned the platform from government devices.