US Treasury restricts investments in China to block military tech advances

The U.S. Department of Treasury has taken proactive measures to mitigate the risk of American investments aiding the military advancements of China. This decision follows an executive order issued by President Biden in August 2023, aimed at restricting the access of countries deemed concerning, particularly China, Hong Kong, and Macau, to American capital in vital technology sectors. The newly enforced rule will limit investments in artificial intelligence, computer chips, and quantum computing, set to take effect on January 2, 2024. Officials, including Paul Rosen, Assistant Treasury Secretary for Investment Security, stress that these investments could provide more than financial support; they represent a risk of enabling the development of military and technological capabilities by countries of concern. The rule not only blocks investments but also mandates that U.S. entities notify the government about transactions involving technologies that pose national security threats. Consequences for non-compliance include significant fines, potentially reaching $368,136 or double the value of the prohibited transaction. In light of strong bipartisan support in Congress for blocking China's advancements, this action reflects an ongoing commitment by U.S. policymakers to curb foreign exploitation of its technological innovations. Overall, the enforcement of this rule aims to safeguard U.S. national security against possible threats arising from foreign military empowerment through American resources.