President Biden Biden orders ban on certain US tech investments in China
After China’s consumer and producer prices, both declined for the first time in the last couple of years showing signs of deflation, new trouble brews for the second-largest economy as US President Joe Biden slaps new bans on investments in advanced technology industries in China in order to protect national security.
President Biden signed an executive order late on Wednesday, banning US investments in certain key tech sectors of China.
The new rules would place restrictions on investments by US private equity and venture capital firms, as well as joint ventures, in Chinese artificial intelligence, quantum computing, and semiconductors, reports CNN.
China’s Ministry of Commerce said in a statement on Thursday that “the ban greatly disrupts the normal pace of business decision-making, the international trade order, and the security of global supply chains”.
The order, the spokesperson said, “seriously deviates from the principles of market economy and fair competition” and disrupts global supply chains.
The proposed rule is designed to target technologies most critical for military advancement.
The White House said in a statement that the Biden-Kamala Harris administration is “committed to keeping America safe and defending America’s national security by protecting technologies that are critical to the next generation of military innovation”.
“Cross-border investment flows have long contributed to US economic vitality. We are committed to taking narrowly targeted actions to protect our national security while maintaining our longstanding commitment to open investment,” said the US government.
Biden signed the executive order following extensive and thorough consultations with hundreds of stakeholders, industry members, and foreign allies and partners.
The new measures, which also apply to companies in Hong Kong and Macau, are set to take effect next year.
Last October, the Biden administration had unveiled a sweeping set of export controls that ban Chinese companies from buying advanced chips and chip-making equipment without a license.
On Wednesday, according to the National Bureau of Statistics (NBS), the consumer price index dropped 0.3 percent in July, compared to the same period last year. Earlier, Bloomberg had anticipated a 0.4 percent decline.
Analysts argue that slowing domestic spending continues to weigh on the country’s post-Covid economic recovery. Analysts also expect the People’s Bank of China (PBOC) to take moderate steps to ease monetary policy for the rest of this year.
[With Inputs from IANS]
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