Biden Targets China’s Tech
Joe Biden has issued an executive order imposing restrictions on certain types of US investments in China's tech sectors. This move aims to prevent American resources from aiding China's military modernization and potential threats to US security. The sectors affected include semiconductors, quantum tech, and specific AI systems.
The order targets various investment avenues such as private equity, venture capital, joint ventures, and new projects. Biden cited a national emergency due to the risk posed by countries like China in critical technology areas. China has expressed deep concern over the order, asserting its right to respond. The US hopes to maintain fair competition and global economic cooperation, but the Chinese Commerce Ministry criticized the move. The Chinese embassy in the US expressed strong disappointment with the measure.
Some of the companies affected by this ban are:
Aero Engine Corp. of China is a state-owned company that develops and manufactures aircraft engines and gas turbines.
Aero Sun Corp. is a publicly traded company that produces special vehicles, pipes, and equipment for the oil, gas, and chemical industries.
Fujian Torch Electron Technology is a privately owned company that specializes in electron beam welding, brazing, and surface treatment technologies.
Huawei Technologies is a privately owned company that is one of the world’s largest telecommunications equipment and smartphone manufacturers.
These are just some examples of the 59 Chinese companies that are banned from receiving the U.S.
investment due to suspected ties to defense or surveillance technology sectors. The full list can be found in the executive order signed by President Biden. The ban will take effect on August 2, 2023
Why did Biden announce this ban?
Biden announced this ban to protect the US national security interests and to prevent the advancement of China’s military and surveillance capabilities using American capital and technology.
According to Biden, some of the Chinese entities that are involved in the development of sensitive technologies and products pose an “unusual and extraordinary threat” to the US national security, foreign policy, and economy.
The ban is also a response to the growing US-China tech rivalry and competition, as both countries seek to maintain or gain an edge in critical sectors such as semiconductors, quantum computing, and artificial intelligence.
How will China respond to this move?
China has reacted strongly to the US move, accusing it of “suppressing” Chinese firms and violating market principles. China has also said that it “reserves the right” to take necessary measures to protect the legitimate rights and interests of Chinese companies.
China has also urged the US to respect the market economy and the principles of fair competition and to refrain from artificially hindering global trade and creating obstacles that impede the recovery of the global economy.
China may also seek to strengthen its ties with other countries and regions, such as the European Union, that are more open to trade and investment with China. However, it is unclear how effective these measures will be in countering the US pressure, or whether they will further escalate the tensions between the two powers.
Which other countries have similar bans?
There are not many other countries that have similar bans on investments in China’s tech sectors as the US. However, some countries have imposed or considered imposing restrictions or sanctions on certain Chinese tech companies or products, especially those related to 5G networks, cybersecurity, or human rights issues. Some examples are:
- Australia: Australia was one of the first countries to ban Huawei and ZTE from supplying equipment for its 5G network in 2018, citing national security concerns. Australia has also imposed sanctions on four Chinese officials and one entity over human rights abuses in Xinjiang.
- India: India has banned more than 200 Chinese apps, including TikTok, WeChat, and PUBG Mobile, since June 2020, following a deadly border clash between the two countries. India has also barred Chinese companies from participating in its 5G trials.
- United Kingdom: The UK has banned Huawei from its 5G network and ordered telecom operators to remove all Huawei equipment by 2027. The UK has also imposed sanctions on four Chinese officials and one entity over human rights abuses in Xinjiang.
- Canada: Canada has not officially banned Huawei from its 5G network, but it has delayed its decision for more than two years amid pressure from the US and China. Canada has also imposed sanctions on four Chinese officials and one entity over human rights abuses in Xinjiang.
Comments
Post a Comment