Introduction

The White House is set to unveil its plans to limit certain U.S. investments in sensitive technology in China, while also mandating notification to the government for other investments. These measures aim to prevent American capital and expertise from supporting China’s military modernization efforts and posing a threat to U.S. national security.

The Executive Order

President Joe Biden is expected to issue the long-awaited executive order this week, with an official announcement anticipated on Wednesday. However, the White House has declined to comment on this matter.

Narrow Targeting

The Biden administration has emphasized that any restrictions on U.S. investment in China will be specific and focused. National Security Adviser Jake Sullivan stated that these measures are not a “technology blockade” as claimed by Beijing. Commerce Secretary Gina Raimondo also stressed the importance of avoiding broad restrictions that could harm American workers and the economy.

Scope of Restrictions

The executive order is expected to target active investments in semiconductors, quantum computing, and artificial intelligence in China. Most investments falling under this order will require notification to the government, while certain transactions may be prohibited.

Increased Visibility

The Biden administration is reportedly planning to expand the range of Chinese industries that require investment reporting. This will provide the U.S. government with greater insight into financial transactions between the two countries.

Impact on Artificial Intelligence

Emily Benson, director of the Center for Strategic and International Studies (CSIS), expects the order to prohibit investments in artificial intelligence for military purposes, while other AI investments will only require notification. The administration will need to define what constitutes a military application of AI.

Implementation Process

Biden’s executive order is expected to initiate a notice of proposed rule-making, allowing for industry feedback and a comment period before finalization. The order will not take immediate effect.

Conclusion

The White House’s plans to restrict U.S. investments in China’s sensitive technology reflect efforts to safeguard U.S. national security interests. The executive order is aimed at preventing American resources from aiding China’s military advancements, while ensuring that restrictions are targeted and do not harm the American economy.