U.S Imposes Restrictions On Investments By VC, PE Firms In Chinese Companies Involved In Semiconductors Microelectronics, Quantum Computing, AI

U.S President Joe Biden on Wednesday(Aug 8) issued an executive order issued restricting investments by U.S venture capital and private equity firms in Chinese companies involved in the areas of semiconductors and microelectronics, quantum information technologies and certain artificial intelligence systems.

The Biden administration said that China was “exploiting, or has the ability to exploit, US investments to further its ability to produce a narrow set of sensitive technologies critical to military modernisation”.

The U.S Department of Treasury has been tasked with the responsibility to implement a new national security programme based on the presidential directive.

The Biden administration has proposed a 45-day period of consultation, seeking input from domestic stakeholders and allied countries, to refine and clarify the rules that will be put in place to fulfil the objectives of the order.

Reacting sharply to the executive order, Chinese foreign ministry termed it as “outright economic coercion and tech bullying” designed to “deprive China’s development rights” in the name of national security.

The U.S has already rolled out series of restrictions on the sale of advanced chips to China.