24 February 2024

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Joe Biden Bans US Tech Investments in China: Know Why

According to a Reuters report, US President Joe Biden issued an executive order on Wednesday banning some new US investments in China, such as computer chips, and requiring government notification in other such industries.

Three industries — semiconductors and microelectronics, quantum information technology, and certain artificial intelligence systems — have been excepted from the long-awaited order’s restrictions on US investments in Chinese businesses.

The aim of the directive is aimed at preventing American resources from assisting China in the development of technology that may enable its military modernisation and undermine US national security. According to Reuters, it focuses on private equity, venture capital, joint ventures, and greenfield investments.

Joe Biden declared a national emergency in a letter to Congress to address the threat posed by the development of “sensitive technologies and products critical to the military, intelligence, surveillance, or cyber-enabled capabilities” by nations like China.


China said on Thursday that it is ‘gravely worried’ about the directive and that it has the right to take action. According to Reuters, the Chinese Commerce Ministry said that the order interferes with businesses’ regular operations and decision-making and threatens the global economic and trade system.

Views of Ministry on Joe Biden’s Ban on Investment’s in China

The ministry said, “We hope the US would respect market economy regulations and the concept of fair competition, and avoid intentionally impeding international economic and trade exchanges and cooperation, or building blocks for the revival of the global economy.

According to Chuck Schumer, the leader of the Senate Democrats, “American funding has too long supported the growth of the Chinese military.The United States is currently taking a first strategic move to ensure that American investments do not support Chinese military development.

The White House said that Joe Biden also received input from allies and the Group of Seven nations before finalising the proposal.

Treasury said the rules only apply to new investments and do not apply to current ones, but they may require disclosure of prior transactions. The action may increase tensions between the two biggest economies in the world. It was “very disappointing,” according to the Chinese embassy in Washington, to see the action.