President Biden signed an executive order Wednesday to block and regulate high-tech US-based investments going toward China—a move the administration said was targeted even though it reflected an intensifying competition between the world's two biggest powers. The order covers advanced computer chips, micro electronics, quantum information technologies, and artificial intelligence. Administration officials said that the effort stemmed from national security goals rather than economic interests, and that the categories it covered were intentionally narrow in scope. The order seeks to blunt China's ability to use US investments in its technology companies to upgrade its military while also preserving broader levels of trade vital to both nations' economies, the AP reports.
The US and China appear to be increasingly locked in a geopolitical competition with a conflicting set of values. Biden administration officials have insisted that they have no interest in "decoupling" from China, yet the US also has limited the export of advanced computer chips and kept the expanded tariffs set up by then-President Trump. China has engaged in crackdowns on foreign companies. Biden has suggested that China's economy is struggling and its global ambitions have been tempered as the US has reenergized its alliances with Japan, South Korea, Australia, and the European Union. The administration consulted with allies and industry in shaping the executive order.
"Worry about China, but don't worry about China," Biden told donors at a June fundraising event in California. The officials previewing the order said that China has exploited US investments to support the development of weapons and modernize its military. The new limits were not tailored to disrupt China's economy, but they would complement the export controls on advanced computer chips from last year that led to pushback by Chinese officials. The Treasury Department, which would monitor the investments, will announce a proposed rulemaking with definitions that would conform to the presidential order and go through a public comment process. The issue is a bipartisan priority, per the AP. In July by a vote of 91-6, the Senate added as an amendment to the National Defense Authorization Act requirements to monitor and limit investments in countries of concern, including China.
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