World
US-China economic confrontation escalates
President Joe Biden has ordered to impose restrictions on American investment in technology sectors in China.
Washington: The United States and China have entered a major economic battle with President Biden signing an executive order imposing restrictions on American investment in sensitive technology sectors in China.
The order also necessitates government approval for funding in other tech sectors.
According to a report by a British newspaper, the United States has introduced restrictions on technology sectors in China, including semiconductor manufacturing, microelectronics, quantum information technologies, and some artificial intelligence systems.
President Biden, in a letter to Congress, stated that they are declaring a national emergency at a national level to counter significant threats posed by the capabilities in sensitive technology and production of adversaries like China in the areas of military, intelligence, surveillance, and cyber operations.
The order specifically targets Chinese companies that are engaged in developing software for chip and tool-making, an area where the U.S., Japan, and the Netherlands hold superiority.
However, the move could exacerbate tensions between these two major economies.
American officials emphasized that the purpose of these restrictions was to counter an "extraordinary threat" to national security.
Senate Democratic leader Chuck Schumer praised Biden's action, saying American money has indirectly boosted China's military rise for too long.
Republicans argued that Biden's measures did not go far enough.
Meanwhile, China's embassy spokesperson in Washington expressed disappointment, stating that these restrictions will significantly hurt the interests of both Chinese and American companies and investors, but China will closely assess the situation.
The new regulations are expected to take effect next year.
Regulators intend to issue a proposed rule-making to further define the scope of the regulatory program and seek public opinions before offering formal recommendations.