23 June,2024 09:24 AM IST | New York | ANI
Joe Biden. Pic/AFP
The Joe Biden administration is mulling to curb US investment in critical Chinese technology industries that are crucial to modernising China's military.
The proposed Treasury Department rules would prohibit certain US investments in Chinese companies that are developing semiconductors, quantum computers and artificial intelligence systems. The Biden administration is trying to restrict American financing from helping China develop advanced technology that could be used for weapons tracking, government intelligence and surveillance, The New York Times reported.
This proposal if put into action, will further strain economic ties with Beijing at a time when trade tensions are rising.
The proposal is expected to be finalized later this year.
"This proposed rule advances our national security by preventing the many benefits certain U.S. investments provide -- beyond just capital -- from supporting the development of sensitive technologies in countries that may use them to threaten our national security," the New York Times cited Paul Rosen, the Treasury Department's assistant secretary for investment security.
Earlier, President Biden signed an executive order calling for the investment ban, which will largely affect venture capital and private equity firms that do business with Chinese companies.
As per the proposed restriction, the investors are required to notify the Treasury Department about certain kinds of transactions, and some types of investments are explicitly prohibited.
If it is implemented, the Treasury Department will have the power to force a divestment, and violations could be referred to the Justice Department for criminal prosecution, it reported.
The rules apply to equity investments, debt financing that could be converted to equity, and to joint ventures.
Earlier in May, US President Joe Biden has directed his Trade Representative to increase tariffs on USD 18 billion of imports from China, including semiconductors, solar cells, batteries, and critical minerals to 'protect' American workers and businesses, the White House said in a statement.
The White House said that the decision has come in response to China's 'unfair trade practices' and to counteract the resulting harms.
"China's unfair trade practices concerning technology transfer, intellectual property, and innovation are threatening American businesses and workers. China is also flooding global markets with artificially low-priced exports.
In response to China's unfair trade practices and to counteract the resulting harms, President Biden is directing his Trade Representative to increase tariffs under Section 301 of the Trade Act of 1974 on USD 18 billion of imports from China to protect American workers and businesses," the White House statement read.
The statement on hiked tariffs on imports from China also noted that the Chinese government has used unfair and non-market practices for too long now."China's forced technology transfers and intellectual property theft have contributed to its control of 70, 80, and even 90 percent of global production for the critical inputs necessary for our technologies, infrastructure, energy, and health care--creating unacceptable risks to America's supply chains and economic security," the White House said.
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