The Biden administration is reportedly planning to issue an executive order early next week, restricting investment in sensitive technologies to China, according to Reuters. This move is viewed by Chinese experts as a pressure tactic repeatedly employed by the US, which they believe will be ineffective and could trigger a stronger backlash from American investors. The experts suggest that this latest blundering move against economic norms might even have implications for Biden’s re-election bid.
The executive order, expected to screen outbound investments in sensitive technologies to China, has been postponed on multiple occasions and may not take immediate effect once issued. Bloomberg reported that US Commerce Secretary Gina Raimondo is planning to visit China in late August, and the topic was also discussed during US Treasury Secretary Janet Yellen’s meeting with Chinese officials last month.
Gao Lingyun, an expert at the Chinese Academy of Social Sciences, emphasized that the recent series of visits by senior US officials to China is not simply an effort to ease tensions, as some Western media claim. Instead, it appears to be a well-worn US political tactic to exert pressure on China on the eve of meetings between the two countries.
The new investment restrictions are expected to target US private equity, venture capital, and joint venture investments in Chinese semiconductors, quantum computing, and artificial intelligence, according to Reuters. This move is seen as a further step on the wrong track of “decoupling and breaking industrial chains,” and experts argue that it politicizes and weaponizes economic and trade issues, going against economic laws.
The US plan also introduces uncertainty and risks for US investors, potentially affecting Biden’s re-election prospects. China has previously expressed its opposition to the US politicizing and weaponizing trade and tech issues, stating that placing arbitrary curbs on normal technology cooperation and trade is not in anyone’s interest and destabilizes global industrial and supply chains.
Experts warn that weaponizing economic and technological cooperation to maintain absolute hegemony may lead to a degradation of the normal business environment, sparking stronger backlash from the business community both in the US and abroad. The US government’s approach to China’s technological development could ultimately harm itself and others while damaging international trade and the global economy.