President Joe Biden is touring the American West to “sell” his economic success at the helm of government. It is what is called bidenomics.
Despite this improvement, which is reflected by all indicators except citizen surveys, his Administration maintains a fixed watch on its greatest competitor, China, to mark the territory.
Thus, the White House reinforced that confrontation with the imposition of new restrictions on US business in certain advanced industries of the Asian giant. This initiative, included in an executive order, is described as a necessary element to protect economic sectors and national security. This already caused Beijing to express its discomfort.
“They are tailor-made and they are not a technological blockade as Beijing says,” Jake Sullivan, national security adviser, pointed out preemptively 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 important first step in the midst of the clash with China to clamp down on financial flows out of the country.
The executive order directly affects three technological sectors such as semiconductors and microelectronics, quantum computing and artificial intelligence (AI). Investments will be vetoed in advanced investigations in these areas, according to official sources in a telephone press conference.
Americans doing business in the United States will also be required to report to the US government on their investments in those three sectors broadly.
Investors who violate these measures will face possible sanctions and be forced to divest themselves of their shares in those businesses. It is controlled by the Treasury Department, which will even have the ability to pursue criminal charges.
Resulting from growing bipartisan concern that US technology could inadvertently help China, the executive order targets a few sectors that may make it easier to help the Chinese military or its surveillance systems at a time when it is about combating the security threats embodied by Beijing, those sources said.
They specified, however, that this initiative does not seek to disturb or interrupt legitimate business with that power. That is why they insisted that this executive order “is a national security action, not an economic one,” they stressed, after indicating that the flow of investment has contributed to the economic vitality of the United States.
But they have detected an evolution. “China does not chase our money, it has a lot of it, they are capital exporters. So we’re not preventing money from going to China. What they do not have is knowledge, and that is why we have seen very often that they connect with a specific type of investment”, they stressed.
The plan intends to offer “maximum clarity” to the industry so that it knows what is “permissible”, they reiterated. As of the order, the Department of the Treasury will establish a guide of guidelines. In short, they insisted, all those who try to make these investments must consult beforehand and specify their development.
