President Joe Biden is touring the American West to “sell” his economic success at the head of the Government. It is what is called Bidenomics.
Despite this improvement, which is reflected by all the indicators except the citizen surveys, his Administration maintains a fixed vigilance on its main competitor, China, to mark the territory.
The White House reinforced this confrontation by imposing new restrictions on US business in certain advanced industries of the Asian giant. This initiative, contained in an executive order, is described as a necessary element to protect economic sectors and national security. This has already caused Beijing to express its displeasure.
“They are tailor-made and are not a technological blockade, as Beijing says”, said Jake Sullivan, national security adviser, regarding these provisions.
The plan assumes that the US will ban private equity and venture capital investments in some technology companies starting next year. One of the stated objectives is to prevent China from developing cutting-edge technology for its armed forces. But these measures, which will not have retroactive effects on US investments already underway, represent a very prominent first step amid the clash with China to clamp down on financial flows out of the country.
The executive order directly affects three technology sectors, semiconductors and microelectronics, quantum computing and artificial intelligence (AI). Investments will be vetoed in advanced research in these areas, as detailed by official sources in a telephone press conference.
Americans doing business in that country will also be required to report investments in these three sectors broadly to the US Government.
Investors who violate these measures will have to face possible sanctions and be forced to divest themselves of the shares in these businesses. Control rests with the Treasury Department, which will even have the ability to seek criminal charges.
A product of growing bipartisan concern that U.S. technology may inadvertently help China, the executive order puts the spotlight on a few areas that could make it easier to help China’s military or its surveillance systems at a moment’s notice. in which it is about combating the security threats that Beijing embodies, the sources said.
They specified, however, that this initiative is not intended to disrupt or interrupt legitimate business with this power. That is why they insisted that this executive order “is a national security action, not an economic one”, they emphasized after indicating that the flow of investments has contributed to the economic vitality of the USA.
But they have detected an evolution. “China is not chasing our money, it has a lot of it, they are exporters of capital. So we are not preventing money from going to China. What they don’t have is knowledge and that’s why we’ve seen very often that they connect with a specific type of investment”, they stressed.
The plan aims to offer “maximum clarity” to the industry so that it knows what is “permissible”, they reiterated. Based on the order, the Department of the Treasury will establish a guideline guide. In short, they insisted, all those who try to make these investments must consult before and specify their development.
