The US Treasury Department has proposed new rules to limit and oversee American investments in China related to artificial intelligence, computer chips, and quantum computing. This draft rule is a follow-up to President Biden’s August executive order, which aims to restrict access to US funds for “countries of concern,” specifically targeting China, Hong Kong, and Macau.
The Biden administration is focused on curbing the technological advancement of China, which could enhance its military capabilities and help it gain an edge in emerging sectors like electric vehicles. In addition to these investment restrictions, the administration has imposed significant tariffs on Chinese electric vehicles.
The proposed rules would require US citizens and permanent residents to provide specific information during transactions in these sectors. Notably, it would prohibit investments in AI systems in China that could be used for military purposes, such as targeting and location tracking.
The Treasury is currently seeking public comments on the proposal until August 4, after which a final rule is expected. While Biden administration officials claim they do not intend to “decouple” from China, recent tensions have heightened, particularly following incidents like the downing of a suspected Chinese spy balloon and the blocking of a Chinese-backed cryptocurrency firm from acquiring land near a sensitive US military site.
